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Apple to British court: iTunes within 'field of use'

Posted by iNext - 2006-04-02

Addressing the British court that's hearing the case of Beatles license holder Apple Corps versus Apple Computer, Apple's attorney claimed that the company's ability to distribute music electronically was "within our field of use" and did not violate the terms of a 1991 licensing agreement.
The two companies squared off in British court on Wednesday, the third major legal battle between the Beatles' record company and the computer and iPod manufacturer. Twice before, Apple Corps has accused Apple of trademark infringement. And twice before, Apple has paid out sizable settlements and agreed to stay out of the music business.

The main crux of Apple Corps' complaints past and present has been Apple's distinctive logo -- a two-dimensional representation of an Apple, with a bite taken prominently from the right side. It's too close to Apple Corps' own logo, a green-skinned Granny Smith-style Apple, the Beatles' record company has said.

The most recent showdown between Apple Corps and Apple Computer was in 1991, when Apple Corps claimed that Apple Computers' development of MIDI control software (used by musicians in conjunction with MIDI-compatible musical instruments) violated the terms of an earlier arrangement. Apple Computer agreed to pay Apple Corps $25 million and promised to stay out of the music publishing business.

Apple Corps says that Apple's development of the iTunes Music Store and its sale of commercial music through that enterprise -- which has netted more than one billion song purchases and downloads to date -- violates that earlier agreement.

Apple Computer said that their previous agreement with Apple Corps says that it can't physically sell music -- such as that on a cassette, vinyl record or CD -- but that the settlement doesn't have anything to do with music purchases and downloads.

Apple Corps' attorney Geoffrey Vos told the judge hearing the case that "permanent downloads are the new CDs." He demonstrated the iTunes Music Store in court to show how often the Apple logo is displayed.

Vos also told the court that Apple Computer had approached Apple Corps with an offer of $1 million for the right to use the trademark prominently before the iTunes Music Store was launched. Apple Corps declined.

In Apple's defense, attorney Anthony Grabiner told the court, "Data transmission is within our field of use, that's what the 1991 deal says and it is inescapable."

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