Path: utzoo!attcan!uunet!lll-winken!csd4.milw.wisc.edu!mailrus!tut.cis.ohio-state.edu!ucbvax!pro-carolina.cts.com!gregp From: gregp@pro-carolina.cts.com (Greg Prevost) Newsgroups: comp.sys.apple Subject: New Apple Suit Message-ID: <8902281456.AA10549@crash.cts.com> Date: 27 Feb 89 19:34:46 GMT Sender: daemon@ucbvax.BERKELEY.EDU Reply-To: pnet01!pro-sat!pro-charlotte!pro-carolina!gregp@nosc.mil Organization: The Internet Lines: 110 >From the San Francisco Chronicle: The company representing the disbanded Beatles raised an unexpected challenge yesterday to Apple Computer Inc.'s use of the word "apple". In a lawsuit filed in London, Apple Corps Ltd. charged that the Cupertino-based computer company violated a secret 1981 agreement under which the Beatles' company granted Apple computer the right to use the trademark on computer products. The agreement reserved Apple Corps' right to use the fruit as a trademark in the music business worldwide. Apple Computer promised not to branch into that field, according to a draft of the copy of the suit. But music sysnthesizing capabilities in Apple's top selling new hardware break that promise, the Beatles' company elleges. "We do not believe we are in breach of the 1981 agreement," an Apple spokeswoman responded. She added, however, that company officials have not seen the suit and could not immediately comment in detail. Apple Corps' suit asks the court for an injunction preventing Apple Computer from breaching the agreement around the world, plus unspecified damages, legal fees and interest. Such a verdict could theoretically halt sales of computers that accounted for roughly $2.7 billion of Apple Computer's $4 billion in sles for the year ended in September. More likely, experts in trademark law say, is a verdict or settlement that could force the computer company to change its labeling or pay millions of dollars in damages. The November 1981 pact agreement ultimately may attract as much attention as the lawsuit. Apple Computer, then four years old, evidently paid the Beatles an unknown amount for the rights to keep using what by then was already the most famous trademark in the computer industry. Apple Computer's founding in 1977 and it's early years have been the subject of several books, but the existence of the agreement has not been revealed before. "It's one of the deepest, darkest secrets in modern business," said Wayne Cooper, a San Francisco lawyer with the firm of Farrand Cooper & bruineiers, which represented the Beatles' company. The music company was founded in 1967, primarily to shelter the Beatles' income from a British individual tax rate that then stood at 94 percent for their tax bracket. Its activities included releases under the Apple label and a short-lived chain of clothing stores. The Beatles broke up in 1970, but London-based Apple Corps still represents the business interests of the three surviving members of the singing group and the late John Lennon's estate. Records are still being sold with the Apple label in some countries, Cooper said. Of late, however, Apple Corps has mainly been involved in lawsuits over Beatles' recordings. Last week, for an example, the Beatles joined with singer Micheal Jackson [he owns the rights to all of the Beatles' songs] to stop a video distributer from selling videocassettes featuring the "Fab Four". Apple Computer's name was suggested by company co-founder Steve Jobs as early as 1975. Some company histories trace the name to Jobs' fond recollections of working in Oregon apple country and his conviction that apples are a perfect food. Steve Wozniak, the company's other co-founder, said yesterday that he had never heard of the 1981 agreement. "I never heard anything about a fuss over the name," said Wozniak, who no longer is associated with Apple Computer. According to the suit, filed in the chancery division of Britain's High Cort of Justice, the 1981 pact barred Apple Computer from using the trademark on hardware, software or services "specifically designed and inteded for synthesizing music." Since 1986, however, Apple has added semiconducter chips and softtware that give its machines many musical capabilities. Products singlesd out in the suit are Apple Computer's Macintosh II, Macintosh SE, Macintosh Plus, Apple IIgs, a kit to add IIgs functions for the Apple IIe, a storage device called Apple CD- SC, and a so-called MIDI interface device for exchanging information between musical instruments and computers. The Beatles tried to give peace a chance with the folks at Apple, Cooper insisted. But negotiations between the parties reached a "screeching explosion" at a meeting in London on February 13, he said. Apple Corps' suit also accuses the computer company of breaching the 1981 agreement by trying to get Apple Corps' trademarks canceled in Britain, West Germany, Sweden and Belgium and by licensing four software companies to use the Apple trademark in connection with music. Besides the parent company in Cupertino, the suit names Apple computer subsidiaries in Britain and West Germany. Experts say it is difficult to assess the strength of Apple Corps' case. "It seems to me the agreement may be enforceable, even if Apple Corps has weak trademark rights," said Ronald Laurie, a Menlo Park lawyer who is an expert in computer industry law. But Neil Boorstyn, a San Francisco attorney who rapresented the Beatles between 1963 and 1969, said Apple Corps cannot argue that the public is confused about the identities of the two companies. The most likely penalty against the computer maker, if any, would be a requirement that the company put some sort of disclaimer label on its products, he said. Other followers of the computer company were more amused than concerned when informed of the suit. "That's funny," said David Korus, an analyst at Kidder Peabody & Co., a New York investment firm. "It's a nuisance suit," added Kimball Brown, an analyst for Prudential Bache Research. The suit could hardly have come at a worse time for Apple Computer, however. The company's stock and credibility on Wall Street have been damaged lately by a surprise forcast of lower second-quarter profits, as a result of a falloff in demand for its most sophisticated products and excess inventory of high-priced semiconductor chips. Thought you all might find that of interests. I picked it off a board in CA. UUCP: [ sdcsvax nosc ] !crash!pro-carolina!gregp Never forget ARPA: crash!pro-carolina!gregp@nosc.mil your towel! INET: gregp@pro-carolina.cts.com Ford Prefect