Apple Could Pay Huge Settlement to the Beatles

[James Fee]

<div class='os_post_top_link'><a href='http://www.forbes.com/technology/feeds/general/2004/09/13/generalcahners_2004_09_13_eng-cahners_dv_eng-cahners_dv_013640_859891589053994060.html' target='_blank'>http://www.forbes.com/technology/feeds/general/2004/09/13/generalcahners_2004_09_13_eng-cahners_dv_eng-cahners_dv_013640_859891589053994060.html</a><br /><br /></div>"<i>Beatles fan Steve Jobs could lose a large bite of his Apple to his idols. The Beatles' company, Apple Corps., is involved in a legal battle with Jobs' Apple Computer, claiming the hardware manufacturer is in breach of a 1991 agreement that that forbids it from using the trademark for any application "whose principle content is music." The two companies have been involved in a number of court battles over the years involving the use of the Apple trademark. Word among the legal community is that an out of court settlement could be imminent and that it will massively dwarf the $26.5 million paid to the Fab Four's company in 1991 in a row over trademark use. One lawyer told Daily Variety, "People are expecting this to be the biggest settlement anywhere in legal history, outside of a class action suit. The numbers could be mind boggling." Earlier this year, the computer company failed in a bid to have the latest case heard in the United States, when a judge in London's High Court in London granted jurisdiction in the U.K. The litigation is seen as one of the main reasons behind Apple Corps. preventing the Beatles catalog of songs being made available on the computer company's iTunes song store. Some speculation suggests the settlement could see Apple Corps. becoming a major shareholder in the computer company, with Paul McCartney maybe even becoming a board member. </i>"<br /><br />Yikes! 8O "The numbers could be mind boggling" has to make any Apple shareholder very scared. The silver lining could be that the Beatles music could be iTunes exclusive in the end. Can you imagine Paul McCartney selling iPods? 8)

[Mojo Jojo]

So what happens when Apple spins off the music store and iPod line to its own entity? A new entity where the name is iTunes and no longer Apple?

[James Fee]

Apple dies, that is what happens....

[Felix Torres]

So what happens when Apple spins off the music store and iPod line to its own entity? A new entity where the name is iTunes and no longer Apple?

The violation ceases to be ongoing.
As is, for every day that Apple sells hardware and software that plays back music, they are incurring extra damages.
At this point, just dropping the Apple name from the pod and iTunes won't absolve them; the agreement is *very* explicit that Apple computer not engage in *any* kind of music distribution or playback.

As to the scope of the damages, it is easy to calculate: how much did Apple *gross* off Pod/itunes sales since they released the first version?
Now multiply by three.

Yes, that is a lot of zeroes...

[Jason Dunn]

The reality is that no one know who the hell Apple music even is - AFAIK they have no active artists, they're just a legacy label that happens to represent one of the biggest musical groups in history. It was stupid for Apple computers to step into the musical arena knowing that they had this contract in place (blame the hubris of Jobs for that), but I fail to see what PRACTICAL, REAL-WORLD effect this has on Apple music. Other than me not being able to find them with Google. ;-)

[Felix Torres]

The reality is that no one know who the hell Apple music even is - AFAIK they have no active artists, they're just a legacy label that happens to represent one of the biggest musical groups in history. It was stupid for Apple computers to step into the musical arena knowing that they had this contract in place (blame the hubris of Jobs for that), but I fail to see what PRACTICAL, REAL-WORLD effect this has on Apple music. Other than me not being able to find them with Google. ;-)

Which would be at issue if the fight were still over trademarks.
But the smart cookies representing the Beatles made it a contract issue.
And the contract was very clearly written.
So the only effect it has on Apple Corps is that they get to take Apple computer to the cleaners for stupidity above and beyond the call of reason. ;-)

Which is to say they never was a single reason to violate the contract.
After all, at this point iPod is a bigger brand than Apple anyway.

[James Fee]

Other than me not being able to find them with Google. ;-)
http://www.applecorps.com/

Not that there is anything....

[Jason Dunn]

So the only effect it has on Apple Corps is that they get to take Apple computer to the cleaners for stupidity above and beyond the call of reason. ;-)

Indeed, one has to wonder what the heck Apple Computers was thinking...

[James Fee]

So the only effect it has on Apple Corps is that they get to take Apple computer to the cleaners for stupidity above and beyond the call of reason. ;-)

Indeed, one has to wonder what the heck Apple Computers was thinking...
I can't imagine that Apple wouldn't have planned for such a problem. What I'm sure is they didn't think it would cost them so much. In the end, Apple is cash rich, Apple can't live without the iPod, iTunes is much better off with the Beatles in the stable, and Canada is still without an iTunes store.

[Felix Torres]

So the only effect it has on Apple Corps is that they get to take Apple computer to the cleaners for stupidity above and beyond the call of reason. ;-)

Indeed, one has to wonder what the heck Apple Computers was thinking...

Something along the lines of:
"If I can only get them into the same room with me, the reality distortion zone will kick in and they'll sing over their first born grandkids for free."

Unfortunately, the Apple corps folks seem to be doing all their dealing via lawyer.
And those sharks are very much immune to the RDZ... :twisted:
Cha-ching!
Queue up the 9 figure settlement...
(Not sure how long Apple computer is going to be cash rich, though.) ;-)

Think about it, the Pod business is about 15% of Apple computer's business.
A pure stock settlement would probably leave Apple Corps as the single largest stockholder in Apple computer.
Or, another way to put it is; largest non-class action settlement?
Wowwee...!

[Mojo Jojo]

I don't know about Apple dying...

But anyways, if MS can settle antitrust suites with coupons... perhaps Apple will just pay Apple Corps with a bunch of iTunes credits! :D

100,000,000 free songs for Paul!

[Mojo Jojo]

For the sake of discussion, did Apple go against their agreement?

I think it is all in how you look at it. Now before you slam me here... take a moment to think about it.

Are 'FYE', 'Suncost', 'Best Buy' (Uh... Much Music is the only store that comes to mind for Canada) Music companies? Or just resellers? One could argue that none of those companies have their own music label and that they just sell CD's.

Building off that is Apple really a music company? Or do they sell digital downloads *FROM* other music companies but make no music themselves?

[James Fee]

I don't know about Apple dying...
What is Apple without the iPod?

1. Silicon Graphics
2. Amiga
3. Gateway
4. Intergraph
5. All of the above

[Felix Torres]

For the sake of discussion, did Apple go against their agreement?



I don't have it handy right now, but the direct quote I saw from the Apple Corps/Apple Computer contract referred explicitly to products (hardware or software) whose primary purpose was music playback or distribution.

Not much room for interpretation there, is there?

Also, remember that Apple computer paid some $60 million to Apple Corps just so Mac users could play music CDs on their Macs.

This might be easier for Apple Computer to defend if it weren't the *third* time they've been sued by Apple Corps for the same thing...

[Jason Dunn]

Are 'FYE', 'Suncost', 'Best Buy' (Uh... Much Music is the only store that comes to mind for Canada) Music companies? Or just resellers? One could argue that none of those companies have their own music label and that they just sell CD's.

Uh, those companies aren't named "Apple". :wink: Isnt' the root of this that Apple Music had the name Apple first, and Apple Computers wanted to keep their name, so Apple music said "Fine, keep the name, but never do anything related to music, because that's what WE do." Or is that not the basic scenario?

[Mojo Jojo]

Update:

Settlement talks are all FUD.

http://news.com.com/Apple+vs.+Apple%3A+Perfect+harmony%3F/2100-1027_3-5378401.html

Another important note quoted from the article about what Apple the computer company has rights to do in the music realm.

According to a recent court decision quoting the 1991 settlement agreement, the Beatles were given the right to use the Apple name wherever their songs were involved and on "any current or future creative works whose principal content is music." However, Apple Computer was allowed to use its brand on "goods or services...used to reproduce, run, play or otherwise deliver such content," as long as it was not on physical media such as a CD.

So, Apple may actually have rights and a good stand agsint this claim and are not as described "idiots".