May 8, 2006 4:08 AM PDT

Beatles judge finds iTunes nothing to get hung about

(continued from previous page)

Physical media as defined by the companies' 1991 agreement were the delivery methods of the time, such as CDs or tapes, the judge wrote. If Apple Computer were selling SD (secure digital) cards on iTunes, that would be different, but the mere sale of data isn't the same thing, according to the ruling.

As for whether the Apple Computer logo on iTunes and in advertisements creates a connection between Apple Computer and the content in violation of the agreement, the judge ruled that the average person can distinguish the difference between a record label and the store in which the music is purchased.

Similar, but different Apples
"A user would be familiar with the notion of buying recordings of creative works from a retailer, and would be capable of not seeing any other association between retailer and the music other than that arising out of the sale itself. That is what happens in shops," the judge wrote.

In 1991, when the two companies drafted the agreement in question, they couldn't have foreseen the growth of the Internet and the digital music explosion, which is in part what makes technology litigation so difficult, said Karol Kepchar, an intellectual-property attorney with Akin Gump in Washington, D.C. "Clearly they didn't anticipate this type of convergence," she said.

In the end, the two companies have similar logos and both are involved in the music business, but they are different enough for consumers to distinguish between Apple the record label and Apple the music store, Kepchar said. "I think this is a sound way of looking at this."

The ruling is a strict conservative interpretation of U.K. trademark law, and a U.S. court might have ruled differently, said Gregory Rutchik, a lawyer with Liner Yankelevitz Sunshine and Regenstrif in San Francisco. A U.S. court, he noted, might have felt that the average person these days considers Apple Computer to be as much of a digital-music company as a personal-computer vendor. Still, "it's a legitimate distinction" to separate the store from the content source, he said.

The decision is a big victory for Apple Computer, which had to pay Apple Corps to settle the dispute in previous years, said Michael Gartenberg, an analyst with Jupiter Media. Legal analysts had expected Apple Computer to have to pay up once again, but Mann agreed with Apple Computer that there's a difference between the sale of a CD and the sale of data that happens to be music, he said.

Apple Corps is expected to appeal the decision. If it's upheld on appeal, Apple Computer and the Beatles might finally come together.

"We are glad to put this disagreement behind us," Apple Computer CEO Steve Jobs said in a statement. "We have always loved the Beatles, and hopefully we can now work together to get them on the iTunes Music Store."

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59 comments

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Not surprised
If you asked me, if the 2 were in court today over the original trademark dispute, Apple computers would win. Too many companies with similiar names and logos, yet somehow will all get buy.
Posted by da_bombdiggidy (42 comments )
Reply Link Flag
Wow, a court siding with Apple!?!?
About time. Next we'll see a court siding with RIM.
Posted by CentrOS (126 comments )
Reply Link Flag
HA HA TOLD YOU SO..
This was a frivolous law suit from the get/go. There was no way Apple Corps. could win, again. And they knew this. Apple Computer has good lawyers.

After giving this some serious thought, I've concluded that this lawsuit was a PUBLICITY STUNT perpatrated by Apple Corps and Apple Computer. They were in cahoots all along. Apple Corps has been out of the limelight for some time now and Steve Jobs, as we all know, is still a big fan of the Beatles.

I'll bet 1,000 bucks that the Beatles catalog comes out first, if not exclusively, in Itunes. Mark my word.
Posted by phoenix8603 (79 comments )
Reply Link Flag
You're an idiot
You're an idiot if you actually thought this was a publicity stunt.

Yoko, and the rest of the gang already had the reward $$$ spent in
their heads. It's always been about money, and always will be.

I do think that sooner or later the Beatles catalog will be on iTunes,
like Steve said...
Posted by NeverFade (402 comments )
Link Flag
It's all Apples and Apples to me
I still dont see what all the bickering is over. The similarity between logos for each corporation stops at the word used to describe each. Visually, each logo is very different. If anything, Apple Computer should be upset with the logo for Apple Vacations and Apple Corps should be going after the weekly grocery ads running pictures of their sales on Granny Smith apples.
Posted by buzzhead61 (6 comments )
Reply Link Flag
Justice
The remaining member of the group, now renamed The Greedy
Unproductive Beatles, deserved nothing. Let me live of the vast
royalties of their adolescences.
Posted by nicmart (1829 comments )
Reply Link Flag
Have you seen Apple Corps' website???
After all these years Apple Corps has done NOTHING in the way of online distribution. And I doubt they ever intend to. They're not in the same industry if Apple Corps has nothing to offer. Apple Corps never had a leg to stand. If they perhaps developed something... ANYTHING, maybe they would have had a shot. Their resources would have been better spent trying to come up with some kind of online strategy. They shot themselves in the foot by producing absolutely nothing. The Beatles were 40 years ago. They need to get over themselves!
Posted by frankz00 (196 comments )
Reply Link Flag
the agreement *explicitly* allows Apple to sell music online
Any other outcome would have been shameful. The agreement
between the two Apples *explicitly* allows Apple Computer to sell
music online in electronic form. It only prohibts them from
delivering muisc on "physical media". So, if the iTunes Music Store
was to start selling CDs as well, or if Apple started to sell iPods
with music already preloaded, then that would be a breach of the
agreement. Electronic delivery of music is not.
Posted by balooh (37 comments )
Reply Link Flag
Outcome would be different in an American court
English courts tend to use a more literal interpretation of the law, whereas American courts take a more expansive view. Had the case taken place in the US, Apple Corp probably would have won. There is little question that Apple Computer is violating the spirit of the agreement if not the letters. At the bottom the issue is trademark dilution. I think it's self-evident that Apple Computer's current buisness dilutes Apple Corp's mark. Mention "music" and "apple" to any consumer, which company would he/she think of first?

Even if we interpret the agreement literally, I don't Apple Computer's argument is airtight. The company does sell physical media--it's called an iPod. Its iTunes service doesn't just exist to delivery data, nor do consumers buy just data. Consumers buy music, which is delivered through the iPod/iTunes infrastructure. That the music is transferred to the device afterward to me is a trivial technicality. The end product is still music on an iPod.
Posted by Chung Leong (111 comments )
Link Flag
the agreement *explicitly* reserves music rights to Apple Corp.
From article at
<a class="jive-link-external" href="http://www.reghardware.co.uk/2006/03/31/apple_vs_apple_day_two/index.html" target="_newWindow">http://www.reghardware.co.uk/2006/03/31/apple_vs_apple_day_two/index.html</a>

Apple Corp., on the other hand, has the rights to market under its brand
"any current or future creative works 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".
Posted by Jackson Cracker (272 comments )
Link Flag
Let's have little talk about tweetle Beatles
Let's have a little talk about tweetle Beatles....

What do you know about tweetle Beatles? Well...

When tweetle Beatles fight,
it's called a tweetle Beatle battle.

And when they battle in a courtroom,
it's a tweetle Beatle courtroom battle.

AND when tweetle Beatles battle with trademarks in a courtroom, they call it a tweetle Beatle courtroom trademark battle.

AND...

When Beatles battle Apple in a courtroom trademarks battle
and the Beatle battle courtroom is a courtroom in London...

...they call this a tweetle Beatle London courtroom trademark battle muddle.

AND...

When Beatles fight these battles in a courtroom with their trademarksand the courtroom is in London and the judge uses his noodle...

...they call this a muddle courtroom tweetle London Beatle noodle trademark battle.
Posted by robbiewilmot (1 comment )
Reply Link Flag
woahhh wait a minute
"During the trial, Apple Corps argued that downloading music is the same as buying a record in a store, while Apple Computer argued that the iTunes Music Store is essentially a means of transmitting data. "

Now if this is the case and downloading(transmitting data) is not the same as buying in the store then why are they prosecuting p2p trading of songs when in fact they are not stealing the records out of the store but in fact simply transmitting data..does this court ruling open a loophole for p2p?
Posted by (8 comments )
Reply Link Flag
No it doesn't
no it doesn't.

They are arguing this way because Apple Computer and Apple
Corps (The Beatles' record company) signed an agreement in
1991 under which Apple Computer is not allowed to sell music
on "physical media" but is allowed to sell music as data transfers
so long they are not involving "physical media".

This is why the judge found in favour of Apple Computer. He
recognised that the iTunes music store falls under those data
transfers which the agreement allows.

Nothing of this has to do with copyright law. It is purely a
contract issue, a dispute about what the agreement signed
between the two companies says.
Posted by balooh (37 comments )
Link Flag
Where did you say you got your law degree?
"Now if this is the case and downloading(transmitting data) is
not the same as buying in the store then why are they
prosecuting p2p trading of songs when in fact they are not
stealing the records out of the store but in fact simply
transmitting data..does this court ruling open a loophole for
p2p?"

In your example, the p2p trading is stealing massive amounts of
music, as opposed to stealing the actual CDs out of stores. Both
activites are illegal, whereas iTunes was legally selling music,
and paying royalties. I'm sure if p2p started paying negotiated
royalties for every song "traded", they would not be in any
trouble.
Posted by VidPro (60 comments )
Link Flag
Not Really
Number one reason why that isn't so. The court was in England.

Since I'm not a lawyer. I cannot say how that would affect the law in the US, if the case had occurred in a US court.
Posted by Thomas, David (1947 comments )
Link Flag
woahhh wait a minute
I think U make an xcellent point. Transmitting data is (or should be)transmitting data, not stealing or copyright infringement. But that was an English court, not a US one, and who would have the $ to fight this one out just so they could swap songs over the Net? Too bad it always comes down to who has the bucks.
Posted by Gwynnaserra (3 comments )
Link Flag
woahhh wait a minute
I think U make an xcellent point. Transmitting data is (or should be)transmitting data, not stealing or copyright infringement. But that was an English court, not a US one, and who would have the $ to fight this one out just so they could swap songs over the Net? Too bad it always comes down to who has the bucks.
Posted by Gwynnaserra (3 comments )
Link Flag
hmm
My point is how can someone say that buying a record(from retail store) is not the same as transmitting data(buing from online store). When you are transmitting a record the same record your buying in the store. Its simply a different way to sell records. Your still selling the same record just differently.

And if a judge thinks that transmitting data is so different than buying it in the store then how come all the record companines are saying it is the same. I have read many stories where the major labels argue downloading music is the same as going to the store...they say its theft. So if it is the same in theft to take from store or download(transmit data) from computer..then how is not the same to sell online(transmit data) or sell in store(retail)
Posted by (8 comments )
Reply Link Flag
you are missing the point
The two Apples had a fight over the use of the Apple brand long
ago. Then in 1991 the sat down and came to an agreement, a
contract both parties signed and which is therefore binding to
both parties.

In a nutshell, the they agreed the following ...

1) Apple Computer could use the brand within the computer
business and Apple Corps could not.

2) Apple Corps could use the brand within the music business
and Apple Computer could not.

3) despite #2, Apple Computer was allowed to use the brand in
conjunction with making hardware and software for the use of
creating music and also delivering music as data transfers.

4) under no circumstances was Apple Computer allowed to use
the brand in conjunction with delivering music on physical
media.

There is nothing illegal about two parties agreeing that one can
sell music on vinyl and CD and the other only by way of data
transfers. It does not matter if copyright treats those two forms
of selling the same way. The only thing that matters here is the
contract.

It is like you making an agreement with your buddy about the
use of a bicycle you jointly own. You can use it in the morning
for delivering newspapers and he can use it during the day to
work as a bicycle courier. If the newspapers start shipping their
newspapers by courier, then your buddy can deliver those. If he
wants to deliver the newspapers the old fashioned way in the
morning, then he cannot as this is your turf.

There is nothing illegal about him becoming a newspaper boy
and there is nothing that stops you from becoming a bicycle
courier. Yet the agreement says neither of you can do so using
the bicycle you share -- you would have to get another bicycle.
It's an arrangement just between you and him about the use of
shared property, nothing to do with labour laws or traffic rules.
Posted by balooh (37 comments )
Link Flag
Do you even think before writing?
"I have read many stories where the major labels argue
downloading music is the same as going to the store...they say
its theft. So if it is the same in theft to take from store or
download(transmit data) from computer..then how is not the
same to sell online(transmit data) or sell in store(retail)"

The record companies are comparing FREE p2p downloads to
stealing CDs from stores, not the legal, paid downloads from
iTunes and the other legal online music stores.

However, in this case, that wasn't even the issue. What was at
stake is the legal agreement between Apple Corps., the Beatles'
company, and Apple, the computer company not allowing Apple
to sell music on physical media. This was not a dispute about
Apple stealing the music, just if the settlement allowed them to
sell music as electronic data without a physical item storing it.
They are not, so they won the case.
Posted by VidPro (60 comments )
Link Flag
Good for Apple computer!
This was a silly lawsuit anyway. I am happy Apple computer prevailed.
Posted by Stan Johnson (322 comments )
Reply Link Flag
in a sense it is tragic for Apple Corps
I believe the judge made the right decision and Apple Computer
did not violate the letter of the agreement. I also believe it could
have been potentially bad for iTunes and the further
development of online music if the judge had ruled in Apple
Corps favour.

Yet I can see very well why Apple Corps are unhappy now. After
all Apple Computer had acknowledged in the 1991 agreement
that the record business was to be Apple Corps area of exclusive
use of the brand.

When they made that agreement, they probably only thought of
music data transfers as a kind of accessory to selling computers,
like the sound effects when you click on some button and
templates for synthesiser software, that sort of thing.

They didn't think as far ahead as to ask the question "Wait a
second ... what if one day all music is sold by data transfer and
not on physical media anymore?" At that point, Apple Computer
would very likely have answered "That would still be your
business, that's not where we are heading".

In other words, Apple Corps have more or less signed away their
trademark because they didn't think of the implications, because
they didn't have the vision. Of course that is no reason to bring
about a lawsuit in defiance of reality. But I think anybody else
would feel it wasn't entirely fair if this happened to them.

It is particularly puzzling that they still didn't see what was
coming when Apple Computer showed them the iTunes music
store before its initial launch. At that point they could have said
something but they didn't. If they had been smart, they would
have said "Oh, this is moving you guys uncomfortably close to
being a record company, can we talk about this?"

Of course by the letter of the agreement Apple Computer was in
its right to do ITMS anyway even if they had opposed it. After all
it didn't involve selling music on physical media. However, at the
time before the ITMS launch, Apple Computer was taking a
considerable risk. Many analysts predicted that it would fail. At
that point, if Apple Corps had offered to share some of that risk
and asked Apple Computer to allow them to join and invest in
the new service, they would probably have become partners,
there wouldn't have been any lawsuit and Apple Corps would
now be part of this success story as opposed to be sitting on the
other side of the fence, envious and angry.

Maybe they should listen to Steve Jobs, put the differences aside
and work together.
Posted by balooh (37 comments )
Reply Link Flag
tweetle beetle battle
This story has an inflamatory, incorrect, and misleading headline. Since the Beatles were not even remotely involved in either lawsuit. (Yes, I know Apple Records owns the rights to some Beatles music.
Posted by Xalorous (24 comments )
Reply Link Flag
Imagine
Imagine there's no Lawyers
It's easy if you try
No DRM to hold us
Just copy on the fly
Imagine all the people
Sharing iTunes for today

Imagine There's no RIAA
It isn't hard to do
Nothing to shill or sue for
And no media surcharge too
Imagine all the players
Playing Beatles tunes in peace

You may say that I'm a dreamer
But I'm not the only one
I hope the big Ono will join us
And John's tunes will be dollar one


:-)
Posted by open-mind (1027 comments )
Reply Link Flag
Um, That Would Be "Dollar _Minus_ One" ...
especially in light of the recently-extended ninety-nine cent per-song pricing Apple got the recording conglomerates to sign up to when the iTunes Music Store opened. Very nice lyrics - make sure you get a contract that allows you to get royalties for digital downloads, though (Yoko will have to be content with royalties from the version carved in stone tablets and CDs! :) ).

Oh, wait, this is a parody, so it's protected by the Fair Use clause in copyright law - or, is it, given the twists wired into the Digital Millenium Copyright Act? Hmmm, that's inspiring me to write my own parody lyrics (with apologies to The Village People):

Young man, there's no need to feel down.
I said, young man, pick yourself off the ground.
I said, young man, 'wipe away that ol' frown.
There's no need to be unhappy.

Young man, there is music, you know.
I said, young man, when you're short on your dough.
You can download, and I'm sure you will find
Many ways to have a good time.

It's fun to violate the D - M - C - A!
It's fun to violate the D - M - C - A!

...

;)

All the Best,
Joe Blow
Posted by Joe Blow (175 comments )
Link Flag
TheBigOno Responds
I just couldn't let that reference pass without comment.As TheBigOno,with no connection to the Beatles,let me start by praising you on your lyrical interpretation of the situation.

I do think that the really workable solution between Apple and the Beatles is a liscensing agreement with the publisher of the music(The Beatles)directly by Apple(computers)without the record company's involvement at all.Now I know the record company will scream like a ***** from being left out of the money pot,but but let's face it,the technology now allows me as the consumer to buy directly from the producerwith as few middle people tacking their cut on for being in the way.

I say The Beatles just need to tell Apple what to charge and what they(the Beatles)require out of that.Stand back and let me fill their Ipod full of Beatle stuff if I want.

Oh,and Yoko,as TheBig to the other Ono,say your sorry,really,and promise to never sing on another album again..Imagine that...
Posted by TheBigOno (2 comments )
Link Flag
TheBigOno Responds
I just couldn't let that reference pass without comment.As TheBigOno,with no connection to the Beatles,let me start by praising you on your lyrical interpretation of the situation.

I do think that the really workable solution between Apple and the Beatles is a liscensing agreement with the publisher of the music(The Beatles)directly by Apple(computers)without the record company's involvement at all.Now I know the record company will scream like a ***** from being left out of the money pot,but but let's face it,the technology now allows me as the consumer to buy directly from the producerwith as few middle people tacking their cut on for being in the way.

I say The Beatles just need to tell Apple what to charge and what they(the Beatles)require out of that.Stand back and let me fill their Ipod full of Beatle stuff if I want.

Oh,and Yoko,as TheBig to the other Ono,say your sorry,really,and promise to never sing on another album again..Imagine that...
Posted by TheBigOno (2 comments )
Link Flag
Awesome, but...
"This just in, Yoko One is suing "PaulR" for copyright infringement of John Lennon's "Imagine" song.
"That's John's song Mr. R &#38; I demand you pay me 3 million dollars in legal damages."

P.S.: The Lennon Music Experience Lab Bus touring the country educating children on the joy of music is sponsered by Apple &#38; appears at the MacWorld conventions...?
Posted by Llib Setag (951 comments )
Link Flag
Devil's advocate here...
Didn't the U2 special edition iPod - preloaded with content -
violate the agreement between the Apples?
Posted by Gomphos (13 comments )
Reply Link Flag
REF: Devil's advocate here...
Gomphos,

Good point, but Apple actally seperated the two. The U2 edition came with a sizeable coupon to purchase the U2 collection from iTunes. The iPod was in fact empty. Now we know why! (That is, besides the fact that iTunes formats the iPod on first connection).
Posted by mooregang (1 comment )
Link Flag
Not "tragic for Apple Corps"
I'm a fan of both Apple and The
Beatles but glad to see Apple win
because their position was the
correct one.

Apple Corps has never done
anything with their brand or
logo so they had nothing to
lose and will lose nothing
from this. Their real brand is
"The Beatles." That is how they
have been and will always be
known and sold.

Only Beatles hard-core fans
and trivia nuts have ever been
aware of "Apple Corps." They
don't even have a real web site
(just a picture of the logo
parked on the domain).

This whole case has been
a waste of money and
bandwidth.

JPL
Posted by James P. Larsen (28 comments )
Reply Link Flag
US v UK
It's interesting that Mr. Rutchik opines that a US court may have
held differently than the UK

One of the first (if not the first) hearings was deciding which
jurisdiction this case would be heard, with Apple Computer
arguing that the case rightfully belonged in USDC, according to
their reading of the resolution of disputes clause in the 91
agreement. Apple obviously lost that argument, but it seemed
clear at the time that they preferred to try the case here in the
US, so it's hard to imagine them taking the risk of exposing
themselves to any potential negative bias pertaining to the
interpretation of the agreement under the eyes of US law.

"The ruling is a strict conservative interpretation of U.K.
trademark law, and a U.S. court might have ruled differently,
said Gregory Rutchik, a lawyer with Liner Yankelevitz Sunshine
and Regenstrif in San Francisco. A U.S. court, he noted, might
have felt that the average person these days considers Apple
Computer to be as much of a digital-music company as a
personal-computer vendor."
Posted by Terry Murphy (82 comments )
Reply Link Flag
From a lawyer to a layman
Clinton, who has proven that not everyone with that last name
can be a Rhodes Scholar, said:

"My point is how can someone say that buying a record(from
retail store) is not the same as transmitting data(buing from
online store). When you are transmitting a record the same
record your buying in the store. Its simply a different way to sell
records. Your still selling the same record just differently."

First, you have the parties wrong. Disputes about peer to peer
are between the music production companies and peer to peer
networks. The issue is not downloading per se, but facilitating
downloading without paying for content. Second, transmitting
data from a legitimate store (say iTMS) is different from
transmitting it from, say, Bittorrent Spy, an illegal operation
resulting in different legal issues.

The dispute between Apple Computer and Apple Corps is not
over the legality of iTMS transmissions, as you seem to think.
The issue is whether Apple Corps can bar iTMS from
transmitting the content because iTMS bears the Apple logo. As
the judge observed, iTMS is merely an intermediary in this
context. It is not acting as a producer of musical content, which
is what the contract forbids.

I think the entire contract should be scrapped in light of the
development of new technology since the 1990s. The contract
is also overbroad in that it effects ALL music content on tangible
media. Apple Corps' control should be limited to content that it
it has an interest in only. Perhaps Apple Computer can get a
declaratory judgment clarifying what is and isn't enforceable in
the contract.
Posted by J.G. (837 comments )
Reply Link Flag
The case was absurd from the start
The main issue is the logo itself.

15 years ago Apple Computer paid Apple Corps $26 million for the right to continue to use its logo in peace.

Apple Computer's multicoloured logo does not look anything like the organic piece of fruit used by Apple Corps. And you can't copyright a fruit produce. Only in America you can copyright anything you fancy regardless of how ridiculous it is, including Happy Birthday song. DAH&

15 years ago online music was just an idea, and nobody knew that it could be a very lucrative business in the future. Apple Corps is just jealous that they didnt get into the game from the start. While all other recording studios are making deals with various online music stores, Apple Corps didnt do anything. Its their negligence for not jumping in the online music wagon.

UK, dont take this legal case as a patriotic symbol. Its just business negligence, and The Beatles are still the best rock band.
Posted by domino360 (41 comments )
Link Flag
Apple Corps Adopts New Logo?
<a class="jive-link-external" href="http://jungle.gen.nz/apple.html" target="_newWindow">http://jungle.gen.nz/apple.html</a>
Posted by junglepayne (4 comments )
Reply Link Flag
Two Apples
<a class="jive-link-external" href="http://www.youtube.com/watch?v=RJrxU4V82AU" target="_newWindow">http://www.youtube.com/watch?v=RJrxU4V82AU</a>
Posted by schillid (1 comment )
Reply Link Flag
 

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