Apple v Apple: Helter Skelter

Apple (computer) and Apple (records) announced
yesterday they had once again (finally?) resolved their trademark dispute, which dated back to the formation of the computer company in the 1970’s. Under the undisclosed terms of the new agreement, the computer company will be the “owner” of the Apple marks and license back to the music company the ones it uses (e.g., the green apple). And now, at last, iTunes will begin to sell Beatles songs.
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I predicted last May that this would be the outcome of the lawsuit brought by the music company two years ago, but it didn’t take a genius to see what was coming.

During testimony in the lawsuit, the music company acknowledged it had been preparing its catalog for digital distribution. When a British judge ruled that the computer company had done nothing wrong in launching iTunes, Steve Jobs was quoted as saying he looked forward to working with the music company. And the same day Jobs launched the iPhone, the company announced it was changing its name from Apple Computer to Apple Inc.

The underlying dispute was about trademarks, an area of law poorly understood even by lawyers who understand other forms of intellectual property, and the area most consistently butchered by the media . But it was even worse in this case, because the parties, in the early 1990’s, had reached a settlement in an earlier dispute that tried to resolve the similarities between their marks as a matter of contract and not trademark. (My view was that the agreement had restricted the computer company more than trademark law would have required.)

But that agreement didn’t—and couldn’t—anticipate the development of information technologies that moved the companies closer together despite the fact that one made computers and the other published pop music. The computer company agreed not to use its marks in the music business, but the music company also agreed to let the computer company use its marks in the sale of any software. iTunes is both, and neither. The agreement simply couldn’t resolve the problem created by technology.

Not that any of that mattered. It was obvious that the music company brought the lawsuit only as a negotiating tactic which, apparently, is the real purpose of most business litigation these days. My company wants to do business with your company. Okay, first sue us.