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Apple Computer Wins Trademark Lawsuit

Apple Computer Inc.(AAPL) is entitled to use the apple logo on its iTunes Music Store, a judge ruled Monday, rejecting a suit filed by Apple Corps Ltd., the guardian of The Beatles' commercial interests.

Apple Corps contended that the computer company had broken a 1991 agreement in which each side agreed not to enter into the other's field of business. But Judge Edward Mann ruled that the logo was used in association with the store, not the music, and thus was not a breach of the agreement.

"I conclude that the use of the apple logo ... does not suggest a relevant connection with the creative work," Mann said in his written judgment. "I think that the use of the apple logo is a fair and reasonable use of the mark in connection with the service, which does not go further and unfairly or unreasonably suggest an additional association with the creative works themselves."

Mann refused Apple Computer's application for an immediate interim payment of 1.5 million pounds ($2.8 million) from Apple Corps toward its legal costs, pending further hearings. Apple Corps faces a similar bill for its own legal expenses.

Lawyers for Cupertino,Calif.-based Apple Computer had argued it was conducting its business legally and that consumers are smart enough to tell the difference between the logos.

Apple Corps uses a shiny green apple as its logo, while Apple Computer has a cartoon-like apple with a neat bite taken out.

Lawyers for each side tussled during the hearing over advertisements for iTunes featuring musical acts U2, Eminem and Coldplay, using the logo. The judge confessed early on that he owned an iPod.

The 1991 agreement ended previous lengthy litigation over the logo. Apple Computer told the court that it paid the Fab Four's company $26.5 million as part of the 1991 out-of-court settlement, and in return had received "a considerably expanded field of use." The terms of the deal were kept confidential at the time.

Apple Corps was started by the Beatles in 1968 and is still owned by Paul McCartney, Ringo Starr, the widow of John Lennon and the estate of George Harrison.

Apple Computer was formed in 1976, when college dropouts Steve Jobs and Steve Wozniak filed partnership papers on April Fools' Day.

Their ubiquitous iPods first came out in October 2001 and the iTunes music store opened for business in the United States in April 2003; it is now available across Europe, in Australia, Japan, and Canada.