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Journal
Tuesday, February 06, 2007  

From Me To You: The Beatles Hand Over "Apple"

Apple Corps. ("The Beatles") and Apple, Inc. (the company formerly known as Apple Computer, Inc.) have settled a trademark dispute that has been running almost as long as the tomayto/tomahto dispute.

Dating back to 1978, (Apple was founded in 1976) the Beatles and Apple have feuded over the rights to the trademark "Apple." The resolution of that lawsuit was compensation in the millions of dollars from Apple to the Beatles, and a promise by Apple to "stay out of the music business."

In 1986, Apple computers became "musical" with the addition of startup chimes and other sound capabilities, and in 1989, Apple again sued, claiming a violation of the 1981 settlement. This time the companies carved out various aspects of the music worlds where each would operate without incursion by the other. The Beatles would retain sole and exclusive rights to "Apple" for the distribution of music, Apple would be able to reproduce music, but could not sell or market it in physical form.

In 1994, when I organized the Aerosmith Cybertour, this was the reason that the Powerbook logo, and not the Apple logo, appeared on the tour shirt marketed as part of the promotion.

In 2003, Apple launched the iTunes Music Store, and the Beatles sued again. But, a judge found, in late 2006, that "physical media" was the limitation, and not music in general, and Apple was found not to have breached that agreement with the Beatles. And that's a whole lotta legal bills for what amounted to nothing.

Which brings us to today, and an announcement, which in itself is not unexpected: the Beatles and Apple have come to yet another new agreement over the use of the "Apple" mark. But this agreement has a very curious element in its construction. According to news reports, Apple (the computer Apple) now owns all rights to the trademark "Apple," and will license back certain aspects of the trademark to the Beatles. In other words, the Beatles gave the Apple trademark to Apple after almost 30 years of defending it as their own. What gives?

Since the terms of the settlement are confidential, we can only speculate. I've seen no other speculation so far, but here's mine:

One of the obligations, or burdens as the Beatles may have come to see it, of trademark ownership is to "police" the mark against all infringers. One clear rule of trademark law is that an owner's failure to defend a mark against third party use can lead to the owner of the trademark losing its exclusive rights to the mark, overall. And, even in allowing a third party to use a mark, as in a license, the owner has a responsibility to monitor the use of the mark to make sure that the licensee meets the terms of the license. In other words, Apple may have grown tired of having to police its mark against a very determined and aggressive third party. Had the Beatles failed to maintain their seemingly endless defense of "Apple" against Apple, they may have lost all rights to it, against everyone!

Could it be that the legal fees associated with policing this mark, and the associated expenses of litigation, have soured "Apple" for the Beatles? By handing the trademark to Apple and getting back only the rights that it needs to be a vestigial record company, the Beatles have shifted the burden and expense of policing the mark to the very people who have caused such expense and consternation all along. Now, even if some upstart were to begin using "Apple" as the name of their record company, or a counterfeiter were to distribute Beatles CDs, the computer and iTunes people, and not the Fab Four and their descendants, would have to foot the bill for the ensuing legal proceedings.

So, in a world where Steve Jobs appears to always get what Steve Jobs wants, "We Can Work It Out," has finally replaced "I, Me Mine," as #1 on the Cupertino/Liverpool hit parade.


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