March 30, 2006: A court case begins that once again pits Apple Computer against Apple Corps, aka The Beatles’ record label and holding company.
The lawsuit caps a long-running legal battle between the two wealthy companies. It’s the final fight in an epic legal battle over music, technology and money.
As was the case with the Macintosh and iPhone, the company name chosen by Apple has been heavily contested over the years. While Apple did not incorporate until 1977, The Beatles’ record label began operating under the name Apple Corps in 1968.
Epic legal battle between Apple and Apple Corps
As a Beatles fan, Steve Jobs would have known this. So did his Apple co-founder Steve Wozniak, who raised the issue as they batted around names for their new computer company. However, no link ever got acknowledged between the two company names.
Plenty of theories explain why Jobs and Woz chose “Apple,” though. For one, Jobs previously worked in an apple orchard. Secondly, the name “Apple” would come at the front of alphabetized computer company directories. And thirdly, the apple symbolizes the biblical source of all knowledge.
Nonetheless, it didn’t take long after the launch of the Apple II for Apple Corps to file a lawsuit protecting its name. The two sides settled in 1981. Apple Computer paid Apple Corps $80,000 and agreed not to enter the music business.
More fighting as Apple embraces music
Problems flared up again in 1986 when Apple added MIDI and audio recording to the Mac and Apple II product lines. In February 1989, Apple Corps sued again, claiming that its 1981 agreement had been violated. In particular, the company singled out the Mac Plus, the Mac SE and the Mac II, as well as the Apple IIGS, AppleCD SC drive and Apple’s MIDI device.
Amusingly, The Beatles’ lawyers suggested that Apple should change its name to “Banana” or “Peach” to avoid future problems.
Once again, Apple found itself forced to pay Apple Corps — this time a far more significant $26.5 million. (Apple tried to pass this bill on to its insurance company, along with $8.5 million in legal fees. This resulted in a separate lawsuit, which did not get resolved until April 1999 by a California appeals court. Apple lost again.)
On this occasion, Apple signed a deal it thought offered long-running protection against the music company’s demands. Apple Computer could manufacture and sell devices that “reproduce, run, play or otherwise deliver such content” so long as this wasn’t on physical media.
iTunes restarts the battle
That might well have ended Cupertino’s legal battles with The Beatles, if not for a new — and extremely lucrative — Apple initiative.
What happened? Jobs decided to launch the iTunes Music Store following the phenomenal success of the iPod. By the mid-2000s, the iTunes Music Store was well on its way to becoming the biggest music retailer in the United States. (Eventually it became the largest in the world.)
This prompted Apple Corps to sue one more time. The outcome of the 1989 lawsuit made many observers think Apple might win this time around. After all, iTunes did not sell any physical media.
However, others suggested that if Apple Corps’ won, the damages Apple would pay would exceed either of the previous two settlements.
Let it be: Apple and The Beatles find peace
Ultimately, the U.K.’s High Court of Justice handed down a verdict in Apple’s favor. The two parties reached a deal in February 2007.
“We love The Beatles, and it has been painful being at odds with them over these trademarks,” Jobs said in the aftermath. “It feels great to resolve this in a positive manner, and in a way that should remove the potential of further disagreements in the future.”
Today, The Beatles’ music is available on both iTunes and Apple Music.
Do you remember the era when Apple Computer battled Apple Corps in the courts? Leave your comments below.