Apple Corps v Apple Computer: The Beatles, iTunes and a 30-Year Trademark Feud

By Imaduddin

Photo: armennano / Pixabay

Long before the iPhone, there were two Apples. Apple Corps was founded by the Beatles in 1968 to run their music business and record label. Apple Computer was founded in California in 1976. For years the two companies lived in different worlds. As soon as computers began to make sounds, and later to sell songs, their names started to collide.

Agreements that kept the peace for a while

According to reporting by The New York Times, the companies first settled in 1981, when Apple Computer agreed to stay out of the music business, and again in 1991, after a dispute over music features in Apple computers. The 1991 agreement, as described in the High Court's later judgment, divided the field: Apple Computer could use its marks for computers, software and data transmission services, while Apple Corps kept its marks for creative works whose main content was music.

The iTunes case

When Apple Computer launched the iTunes Music Store, Apple Corps sued in London, arguing that selling recorded music under the Apple name broke the 1991 deal. On 8 May 2006, Mr Justice Mann of the High Court of England and Wales ruled for Apple Computer. In his judgment, the judge found that the Apple marks on the iTunes store were used in connection with the store as a data transmission and retail service, not on the music itself. The use therefore fell within the area the 1991 agreement allowed.

Apple Corps said at the time that it would appeal, but no appeal was ever decided. On 5 February 2007 the two companies announced a new agreement. According to Apple's announcement, Apple Inc. would own all of the trademarks related to "Apple" and would license certain of them back to Apple Corps for its continued use. The dispute that had run for almost three decades was over. According to Apple's announcement of 16 November 2010, the Beatles' music then became available on the iTunes Store for the first time.

What the case teaches

The Apple story shows how a coexistence agreement can work well for years and then fail when a business changes in ways nobody predicted. The 1991 drafters were thinking of computers and record labels, not online music shops. The case also shows how much turns on the precise wording of such agreements: the outcome in 2006 depended largely on how the judge read the words describing permitted fields of use.

The Indonesian angle

Coexistence and consent agreements also appear in Indonesian practice, for example when two owners of similar marks agree to share a market. Such agreements are contracts between the parties and do not by themselves bind the DJKI, which still examines applications against the grounds in Law No. 20 of 2016 on Marks and Geographical Indications. Any agreement should define fields of use clearly and say what happens when one side moves into new products or online channels.

Sources

• High Court of England and Wales, Apple Corps Ltd v Apple Computer, Inc [2006] EWHC 996 (Ch) (8 May 2006) (BAILII)
• Apple Newsroom, "Apple Inc. and The Beatles' Apple Corps Ltd. Enter into New Agreement" (5 February 2007)
• The New York Times, "After Long Dispute, Two Apples Work It Out" (6 February 2007)
• Apple Newsroom, "The Beatles Now on iTunes" (16 November 2010)