Both Sides Make Closing Arguments in Apple Trademark Trial

LONDON – A lawyer for Apple Computer (AAPL) on Wednesday defended the company's right to use the apple logo on its iTunes Music Store and in a series of TV advertisements for iTunes, despite objections from the Beatles' Apple Corps recording label.

Apple Corps Ltd. is suing Apple Computer Inc. in London's High Court, claiming the computer company broke a 1991 agreement in which each agreed not to enter into the others' field of business.

The British company, started by the Beatles in 1968, argues Apple Computer has infringed on its territory by entering into the music business, and is seeking to force Apple Computer to drop its apple logo from iTunes and pay unspecified damages.

"We say that Apple Computer has been using the Apple mark in connection with musical content," said Geoffrey Vos, a lawyer for Apple Corps, as he gave his closing arguments Wednesday. "It uses those marks on its music store site at the point of sale of the music content ... it signs artists on its site in just the way a record company would."

Anthony Grabiner, a lawyer for Apple Computer, said Wednesday that advertisements featuring musical acts U2, Eminem and Coldplay were entitled to display the apple logo because they were promoting the iTunes store and its download services and not the music itself.

"Viewers aren't ignorant people, but ... have significant understanding of what Apple Computer does and the object of the exercise, accepted by people watching, was to get the benefit of the download," Grabiner said during his closing arguments in the case.

"Apple Computer has the exclusive right to use the apple mark on such a broadcast, if used to indicate the source or origin of the hardware and downloading services mentioned in the advert," he said.

At the core of the Apple vs. Apple dispute are conflicting interpretations of the 1991 agreement that ended more than a decade of legal wrangling between the two companies.

Grabiner has rejected Apple Corps' claim that the tech company's iTunes Music Store violated the trademark agreement.

He has said the Cupertino, Calif.-based computer company paid the Fab Four's firm $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.

Grabiner has said the "distribution of digital entertainment content" was permitted at Apple Computer under the agreement.

But Vos has argued that Apple Computer's music distribution business "was flatly contradictory to the provisions of the agreement."

He said Wednesday that Apple Computer had breached the 1991 agreement by providing a "seamless integration of hardware, software and music."

Apple Corps, whose logo is a green Granny Smith apple, is still owned by Paul McCartney, Ringo Starr, the widow of John Lennon and the estate of George Harrison.

Vos has argued that while Apple Computer is entitled to produce programs like iTunes, it should stay out of the music business if it uses the logo, a cartoonish apple with a neat bite out of its side.