TRADE MARK / CONTRACT
The internet, technology, all areas
Apple Computers survive assault from The Beatle’s Apple Corps: Apple Corps Limited v Apple Computer, Inc. (2006) EWHC 996 (Ch)
Apple Corps has lost its High Court action in the United Kingdom to prevent Apple Computers using the mark (name) Apple in connection with it’s iTunes online music store. Mr Justice Mann held that the ongoing use by the computer company has not broken a 1991 deal aimed at ensuring there would not be two ‘Apples’ in the music industry. The first agreement between the parties was in 1981 concerned the use and registration of the word “Apple” and various apple logos. Mann J said “I do not need to set out the detailed terms of that  agreement. In general terms, Computer was allowed to use its marks in relation to computer goods and services, but not use them in relation to computer equipment specifically adapted for use in the recording or reproduction of music, or in relation to operational services relating to music. It was also prevented from using its marks in relation to apparatus specifically designed and intended for synthesising music unless certain restrictions were met. Corps could use its marks in relation to sound and video recording, and reproducing apparatus and instruments, and sound and video records, but not computers and computing systems. That was how the parties divided up the product territories at the time. ” In 1991 a new Trade Mark Agreement (TMA) was entered into and Apple Computers paid Apple Corps US $26 million. Mann J said that “As will be apparent from the short description of the 1981 agreement, the TMA shifted the boundaries between the respective parties’ exclusive fields of use so that Computer was entitled to a wider-ranging field of use in relation to, inter alia, equipment and delivery services. There remained, however, an important boundary line between Computer’s permitted field of use and musical content – the latter was the exclusive preserve of Corps. Whether or not Computer has crossed that boundary is what lies at the heart of this action”. After 1991 both parties had the right to use their respective logos (Apple Corp being a half cut apple / green apple and Apple Computers the stylized Apple logo with rainbow colouring. BOTH Apple Corps and Apple Computers could use the mark ‘Apple’ in their respective areas. Apple Corp argued that the 1991 agreement gave them the exclusive rights to use the Apple trademark for the record business. The 1991 TMA provided that “whereas, the context in which this Agreement arises is the parties’ desire to reserve for Apple Corp’s field of use for its trademarks, the record business, the Beatles, Apple Corp’s catalog and artists and related material all as set forth in section 1.3 herein and to reserve for Apple Computer’s field of use for its trademarks, the computer, data processing and telecommunications business as set forth in section 1.2 herein and to co-ordinate the use of their respective trademarks in such fields of use as set forth in section 4 herein”. The agreement then goes on to provide more detailed definitions of each parties field of use:
1.2 ‘Apple Computer Field of Use’ means (i) electronic goods, including but not limited to computers, microprocessors and microprocessor controlled devices, telecommunications equipment, data processing equipment, ancillary and peripheral equipment, and computer software of any kind on any medium; (ii) data processing services, data transmission services, broadcasting services, telecommunications services; (iii) ancillary services relating to any of the foregoing, including without limitation, training, education, maintenance, repair, financing and distribution; (iv) printed matter relating to any of the foregoing goods or services; and (v) promotional merchandising relating to the foregoing.
1.3 ‘Apple Corps Field of Use’ means (i) the Apple Musical Artists; the Apple Catalog; personalities or characters which appear in or are derived from the Apple catalog; the names, likenesses, voices or musical sounds of the Apple Musical Artists; any musical works or performances of the Apple Musical Artists; (ii) any current or future creative work whose principal content is music and/or musical performances; regardless of the means by which those works are recorded, or communicated, whether tangible or intangible; (iii) promotional merchandise relating to any of the foregoing; …
1.4 ‘Apple Computer Marks’ means (i) any design, reproduction or other depiction of an apple, in whole or in part, except for a whole green apple or a half apple (of any color(s)); and (ii) the word ‘Apple’.
1.5 ‘Apple Corps Marks’ means (i) any design, reproduction or other depiction of an apple, in whole or in part, except a ‘rainbow’ or multicolour striped apple (in whole or in part) or any apple (of any color(s)) with a ‘bite’ removed; and (ii) the words ‘Apple’, and ‘Zapple’.”
These provisions have come back to haunt Apple Corps especially as technology has blurred the meaning of the TMA. Mr Justice Mann ruled that the computer company used the Apple logo in association with its store, not the music, and so was not in breach of the 1991 TMA saying “once one is in the store the apple would be taken as denoting the store (in the sense of the service) and perhaps the software (but that does not matter), but I do not see that it goes further than that and adds some additional form of trade connection with the content of the recordings”. The judge further held that advertisements for iPods and iTunes had not breached the 1991TMA – and so iPods and iTunes will still be able to carry the Apple name and logo. Apple Corps manager Neil Aspinall said “With great respect to the trial judge, we consider he has reached the wrong conclusion” and made it clear that Apple Corps still maintained that Apple Computers had extensively “broken the agreement” and that Apple Corps would be “filing an appeal and putting the case again to the Court of Appeal.”