Beatles Record Label Taking Bite Out of Apple
While there is no doubt the principal purpose of the computer company's products is to buy and play music, Apple Computer states that the two companies have "differing interpretations" of the 1991 agreement. Many believe this is the reason that the Beatles have kept their catalogue off online music stores, such as iTunes.
Apple (Nasdaq: AAPL) Computer and Apple Corps, the Beatles' record label, have been in legal disputes since 1981, just five years after Steve Jobs and Steve Wozniak founded the computer company in Jobs' garage.
Originally, Apple Corps sought sole ownership of the name "Apple" as a corporate title, yet they finally agreed to use the title for music, while allowing Apple Computer to use the title for computer systems.
In 1989, Apple Corps sued the computer company for breech of contract, accusing them of violating the original agreement because it was selling music synthesizers.
This dispute was settled in 1991, with Apple Computer paying the Beatles' label an estimated $27 million, as well as initializing an updated agreement.
Fate All but Sealed
This agreement stipulated that the computer company could not use the title "Apple" for any works "whose principal content is music and, or performances."
Unfortunately for Apple Computer, Apple Corps believes that iTunes, the iTunes music store and the iPod break this agreement. For this reason, Apple Corps sued the computer company again this year for breech of contract.
After an American judge ruled the case should be heard in England since the 1991 agreement was conducted under English law, Apple Computer's fate has all but been sealed.
Many sources state the chance of beating the Fab Four in their home country is dubious at best, not to mention that Apple Corps has a strong case.
While there is no doubt the principal purpose of the computer company's products is to buy and play music, Apple Computer states that the two companies have "differing interpretations" of the 1991 agreement.
Settlement Likely
Many believe this is the reason that the Beatles have kept their catalogue off online music stores, such as iTunes.
If they had released these songs on iTunes, the judges would almost certainly rule in favor of Apple Computer.
It would be nice if the English court rules in Apple Computer's favor. However, the two companies will most likely settle out of court, and the payout will likely far exceed the US$27 million from 1991.
A 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."
Some insiders are even speculating that Apple Corps could become a major shareholder in Apple Computer, with Paul McCartney even becoming a member of the board. It will be interesting to see the outcome.
(Source: http://www.macnewsworld.com/story/Beatles-Record-Label-Taking-Bite-Out-of-Apple-36896.html)
