Apple v. Apple: 30 Years in Court
By Joanna L.
Apple makes over $65 billion in yearly revenue, sits on an
enormous pile of cash, and will take anyone to court who tries to threaten a
dime of it. With over 300 registered trademarks and service marks, Apple has
created a lot of its wealth from this mark ownership (along with Apple’s
patents, copyrights, etc). The tech
giant has registered font names (“Chicago,” “New York,” and “Geneva”),
words beginning with “i” (“iMovie,” “iCal,” “iLife,” “iMac,” “iPod,” “iPad”),
and slogans (“There’s an app for that.”).
Between
January 2008 and May 2010, Apple, Inc. filed over 350 cases with the US Patent
and Trademark Office. Most of these are in regards to the use of words like
“apple,” “pod,” and “safari.”
Ironically, a lot of these have been directed at actual apple sellers.
However, a brand like Apple needs to keep an eye on the bottom-line for
shareholders and protect its name and reputation. At times, it seems Apple goes
too far in asserting trademark rights, but that’s for the courts to decide… if
they ever get to court! Apple has been known to get a lot of cases settled with
those piles of cash I mentioned. But this is nothing new for the company – in
fact, one suit lasted 30 years.
In 1978,
the Beatles’ record company, Apple Corps. sued Apple Computers (they changed it
to Apple, Inc. in 2007 to reflect its growing line of products) for trademark
infringement for use of the name “Apple” for their new computer company. The
parties settled in 1981 with $80,000 paid to Apple Corps., and added a
condition: Apple Computer agreed not to enter the music business and Apple
Corps. agreed not to enter the computer business. Seems simple enough, right?
Not so…
Apple
Computer added MIDI, other audio recording
capabilities, and a synthesizer sound chip to its new Apple II line of
computers in 1986. In 1989, Apple Corps. sued citing a breach of their prior
agreement and the court agreed. The decision effectively ended the Apple II
line and all further development of advanced, built-in musical hardware. However, the Apples found themselves pitted
against each other yet again in 1991 when Apple Computer sampled a sound system
called “Chimes” and added it to the Macintosh operating system. Once again the
parties settled, but this time for $26.5 million and a new set of guidelines
for future use of the word “Apple” and the apple logo. Apple Corps retained the
right to use "Apple" or their apple logo on any "creative works
whose principal content is music."Apple Computer retained the right to use
"Apple" or their apple logo on "goods or services...used to
reproduce, run, play, or otherwise deliver such content," as long as it
isn't on physical media (like a CD). Later, Apple Computer would rename
“Chimes,” calling it “Sosumi,” pronounced “So-sue-me.”
When Apple
started developing the iTunes Music Store, the company became nervous about
breaching the agreement and offered Apple Corps. $1 million in 2003 for use of
“Apple” in conjunction with the digital music service. The Beatles turned them
down only to see the online music store launched with the “Apple” name anyway.
Cue massive lawsuit. But, surprise! Apple Computer wins this time -
essentially, the computer company prevailed because they argued that the issue
turned on whether they were a service supplier or a content carrier. In 2006,
the court said that they were only acting as a service supplier, and based on
the wording of the previous agreement, it was found that "no breach of the
trademark agreement [had] been demonstrated." Apple Corps was ordered to
pay over $2 million to Apple Computer in legal fees. The Beatles appealed and
nothing new about the dispute surfaced. However, in the 2007 keynote address
given by Steve Jobs, Apple’s CEO, the Beatles were featured throughout the
presentation. One month later, it was announced that the two companies had
reached a new agreement: Apple, Inc. would own all trademarks related to
"Apple" and the respective logos. Apple, Inc. agreed to license back
to Apple Corps certain trademarks for their continued use. Soon after, Apple
started selling the Beatle’s catalog on iTunes. Some have speculated that the
Beatles were paid $500 million to end the dispute and allow the sales.
Apple has
been involved in many trademark suits over the years, and it seems will
continue to be as long as they operate. Some of the claims seem almost silly at
first glance, but in examining the dispute with Apple Corps., I hope I’ve
explained one of the more interesting ones. With companies like Apple expanding
its services and products every day, who knows how far these trademark and
service mark suits will go…
