iTunes hits nerve in long Beatles feud

The Apple Record logo on an LP

LONDON - Two music industry revolutionaries, the Beatles and Apple Computer, face off in a London court this week over Apple's iTunes download service - the latest action in a decades-old trademark dispute.

Apple Corps, which represents the Beatles' business interests, claims iTunes violates a 1991 agreement barring Apple Computer from using the apple name and logo in connection with music distribution. Apple Computer has sold more than a billion songs through iTunes for its iPod music player.

It's the third time Apple Corps has sued the California-based company over the apple trademark, which the Beatles have used since the late 1960s. Apple Computer was founded by Steve Jobs and Steve Wozniak as a Silicon Valley start-up on April 1, 1976.

"It's a high-risk action for both companies," Rosalind Messer, an intellectual property expert at London-based law firm Norton Rose, said. "You're asking the court to interpret what the companies intended 15 years ago, when the technology at stake was a generation away from where we are now."

She said a judgment or settlement in favour of Apple Corps might cost Apple Computer tens of millions.

In 1991, the year the world wide web was invented, Apple Computer's main products were Macintosh personal computers and "Powerbook" notebook-sized computers.

In the last three months of last year, the company sold 14 million iPods, more than 10 times the number of Macintosh computers. It holds 69 per cent of the American market for music players, with iTunes accounting for 72 per cent of legal music downloads in the first nine months last year. Apple Computer paid Apple Corps US$26.5 million in 1991 to settle litigation over the trademark after it introduced new hardware and software making it easier to synthesise sound.

The issue before the court is whether that settlement, which bars Apple Computer from distributing compact disk or tapes, also covers iTunes, which allows customers to download digital music files.

Apple Computer spokesman Alan Hely said: "Unfortunately, Apple and Apple Corps now have differing interpretations of this agreement and will need to ask a court to resolve this dispute." 

- BLOOMBERG