Money can’t buy me trademarks
A British judge has ruled in favor of Apple Computer in a trademark-related suit brought by Apple Corps (the Beatles’ commercial entity, controlled by the Fab Four and their heirs). The AP story is here.
The ruling is based closely on a 1991 agreement between the two companies, settling previous litigation that arose when Apple computers started to make its machines Midi-compatible. The Beatles-related Apple saw that as an incursion into the music business. When they settled (with the computer company paying its opponent $30 million) the parties tried to divide the world between “creative” musical works on one hand and the means of delivering that content on the other. Good luck!
Their deal (in section 4.3) provides in part [emphases added]:
The parties acknowledge that certain goods and services within the Apple Computer Field of Use are capable of delivering content within the Apple Corps Field of Use. In such case … Apple Computer shall have the exclusive right to use or authorize others to use the Apple Computer Marks on or in connection with goods or services [defined in the contract] (such as software, hardware or broadcasting services) used to reproduce, run, play or otherwise deliver such content [with the exception of physical media such as a compact disc].
The judge essentially found that iTunes and iPods are delivery devices for music, not creative musical works. That seems correct to me on these facts. But interestingly, I think this would be a close call if it were a start-from-scratch trademark case and not a contract case based on a settlement agreement. In other words, the Beatles might have given away too much of their trademark rights when they settled 15 years ago.
The whole story demonstrates the perils of drafting trademark settlement agreements, particularly in an area where technology is evolving. I had a similar case in private practice where our client sued to enforce a trademark settlement agreement and found that enforcing the language of the settlement was in some ways harder — not easier — than winning under straight trademark law. If this experience gets replicated too often, it might even discourage parties from settling trademark disputes.
We haven’t seen the last of this, as the Beatles’ lawyers say they will appeal. Maybe they are scared of settling again?
Filed under: Trademarks
[...] The media is reporting a settlement in the long-running trademark dispute between Apple Inc. (of iPod fame) and Apple Corps. (of Beatles fame). The Fab Four’s corporate alter ego had objected to the computer-maker’s increasing move into music, alleging that the two parties’ 1991 settlement of a previous lawsuit reserved that turf for Lennon & McCartney, not Jobs & Wozniak. The computer company had won the most recent round of litigation last may in England, but the lawyers for the lads from Liverpool had appealed that ruling. The general assumption seems to be that, even if the folks at the California-based Apple thought they were going to win the appeal too, they had a more important goal in mind: finally getting the Beatles onto iTunes! The press release announcing the settlement hints as much. [...]