Featured Article: Podcast - Apple Weekly Report #128: Lawsuits, Diablo & iPhones
McCartney Rumored Apple Board Member In "Mind Boggling" Beatles Settlement
by , 2:30 PM EDT, September 14th, 2004
Variety has set the speculation machines on fire today by reporting that Apple and The Beatles are close to a settlement in the two companies' legal dispute. According to the entertainment magazine, the settlement would "dwarf the US$26.5 million" paid to the Beatles in the 1990s the last time they sued Apple. Variety also says that there is speculation that Sir Paul McCartney cold become a board member at Apple. From the magazine:
Word among the legal community is that an out of court settlement could be imminent and that it will massively dwarf the $26.5 million paid to the Fab Four's company in 1991 in a row over trademark use.
One 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 speculation suggests the settlement could see Apple Corps. becoming a major shareholder in the computer company, with Paul McCartney maybe even becoming a board member.
The Beatles sued Apple in 2003 for breach of contract after Apple entered the online music download business with the iTunes Music Store (iTMS).
According to the (remaining two of the) Fab Four, the iTMS violated a 1991 settlement between The Beatles' management company, Apple Corps, and Apple Computer that precluded Apple Computer from being involved in the music business. Apple Corps owns a trademark for its name in the music business, which was the source of that lawsuit and the subsequent payment of US$26.5 million from Apple in 1999.
For his part, Apple CEO Steve Jobs has maintained that the issue between The Beatles and his company was a trademark dispute. In September of 2003, Steve Jobs told UK newspaper the Independent that:
"Apple Corporation and Apple [Computer] signed a legal agreement more than a decade ago. I wasn't there, and it says what each company can do with their trademark. I inherited that, and right now there's a disagreement about this. It's a trademark dispute... We might have to get a judge to decide on it."
Later that month, UK newspaper The Times reported that Mr. Jobs had said of the lawsuit that, "It's really stupid. We can't reach an agreement, but the courts could drag on for a few years."
In October, he added to that sentiment by saying that, "It's unfortunate because we love the Beatles. I'd do anything for those guys." In fact, one of the legends of Apple's founding has it that the name Apple Computer did indeed stem from Steve Jobs' love of The Beatles.
The Beatles have been quite litigious over the years through its corporate branch, Apple Corps. In addition to suing Apple Computer three times, The Beatles have aggressively defended their copyrights and other legal rights through the courts.
For its part, Apple has an enormous cash reserve of more than US$5 billion.
The Mac Observer Spin:
Any payout to The Beatles of less than US$150 million won't have much of a material effect on Apple Computer, save that it's a waste that didn't need to happen in the first place. Apple should have known better when the company embarked on its musical endeavors, or at least set itself up in such a way that it was protected. Remember that when the iTMS was first launched, its URL was Apple.com/music, something that was shortly changed to Apple.com/iTunes.For all we know, however, Steve Jobs was planning on being sued, and this is all part of his master plan. Stranger things have certainly happened.
That said, it would be a huge coup for Apple to get Sir Paul McCartney on its board. Note that Variety was only reporting speculation, so who knows if that part of the report was true, but we think it would be a good thing for Apple were it the case. It would also be a major coup for Apple if it could land a significant exclusive with The Beatles' catalog for the iTMS.
Observer Comments
What the Beatles are doing is nothing less than extortion, and it disgusts me. I took these court documents to the law school here and had them look it over, and both cases are a joke. Apple Comp. had to pay 26.5 Million to Apple Corp. beacuse, get this they included speakers in their computers!!!!! This is just wrong, and I hope the Beatles get laughed off the planet for this pathetic garbage.
[/rant]
Tue Sep 14, 2004 2:47 pm Subject: Disguts me, ouch.
Originally posted on macrumors.com forum by atat_jack:
Quotehttp://www.courtservice.gov.uk/judg...ple-v-apple.htm
Key points, as I see them:
"Apple Computer Field of Use"* means (i) electronic good,s including but not limited to computers, microprocessors and microprocessor controlled devices, telecommunications equipment, data processing equipment, ancillary and peripheral equipment, and computer software of any kind on any medium; (ii) data processing services, data transmission services, broadcasting services, telecommunications services; (iii) ancillary services relating to any of the foregoing, including without limitation, training, education, maintenance, repair, financing and distribution; (iv) printed matter relating to any of the foregoing goods or services; and (v) promotional merchandising relating to the foregoing.
"Apple Corps Field of Use" means (i) the Apple Musical Artists; the Apple Catalog; personalities or characters which appear in or are derived from the Apple Catalog; the names likenesses, voices or musical sounds of the Apple Musical Artists; any musical works or performances of the Apple Musical Artists; (ii) 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; (iii) promotional merchandise relating to any of the foregoing; (iv) merchandising relating to the Apple Musical Artists and the Apple Catalog and the related subject matter set forth in subsection (i), including, without limitation, the commercial exploitation of personalities, characters, names, designs, images, words, photographs, drawings, or other materials through articles such as posters, toys, games (including computer games), novelties, figures, figurines and clothing; and (v) printed matter relating to any of the foregoing goods or services.
"Apple Computer shall have the exclusive worldwide right, as between the parties, to use and authorise others to use the Apple Computer Marks on or in connection with goods and services within the Apple Computer Field of Use.
Apple Corps shall have the exclusive worldwide right, as between the parties, to use and authorise others to use the Apple Corps Marks on or in connection with goods and services within the Apple Corps Field of Use.
"The parties acknowledge that certain goods and services within the Apple Computer Field of Use are capable of delivering content within the Apple Corps Field of Use. In such case, even though Apple Corps shall have the exclusive right to use or authorise others to use the Apple Corps Marks on or in connection with content within subsection 1.3(i) or (ii), Apple Computer shall have the exclusive right to use or authorise others to use the Apple Computer Marks on or in connection with goods or services within subsection 1.2 (such as software, hardware or broadcasting services) used to reproduce, run, play or otherwise deliver such content provided it shall not use or authorise others to use the Apple Computer Marks on or in connection with physical media delivering pre-recorded content within subsection 1.3(i) or (ii) (such as a compact disc of the Rolling Stones music).
Now, it seems to me that after reading some of that, Apple Computer has a decent case. But then again, I know absolutely nothing about law.
Every company should vigorously defend its trademarks and IP. This all started decades ago between Apple Computers and Apple Corp. Since this is the 3rd suit, one would have to ask does Jobs not ever learn his lesson? Or perhaps this is all part of a plan to get McCartney on his board and the Beatles catalog on the iTunes inventory.
Either way I can assure you of this. Tables turned, Jobs would not hesitate to sue McCartney or Apple Corp. I've been on the receiving end of Jobs litigation and it was even more frivolous than this.
The Beatles have a right to defend their trademarks, their IP, and anything else they have produced over the years, just as Jobs does or anyone else for that matter.
Tue Sep 14, 2004 4:01 pm Subject: Not a Beatles fan, but...
The Beatles and their music just don't appeal to me, but from a business standpoint, i can see the perceived value in having an exclusive on distributing their catalog online.
But having that exclusive right does not automatically mean that they'll profit enough in the forseeable future after paying the rumored settlement amount. If that amount truly negates profits made related to iTMS and the iPod, then what good would having the catalog in the near-term be, especially if only sold at .99/per? (Surely, a great deal of their fans already have vinyl, tapes and cds)
I don't see any value in having Paul McCartney on the board of Apple and possibly see it as an unwanted distraction, considering how strong-willed Steve Jobs is.
Anyway, for those interested in the full read, here it is:
http://www.courtservice.gov.uk/judgmentsfiles/j2468/apple-v-apple.htm
Tue Sep 14, 2004 4:05 pm Subject: might be part of the settlement
mike3k
you might be closer than you think.
Apple picks up the company
gets exclusive rights to the music
Sir Paul on the board
I don't believe that Steve J went into this without working with the attorneys for Apple and planning for what lies ahead.
Th big thing, of course, would be the exclusive rights to the Beatles music.
Quotedeepkid wrote:
...then what good would having the catalog in the near-term be, especially if only sold at .99/per? (Surely, a great deal of their fans already have vinyl, tapes and cds)
It would be a big deal because the Beatles music is not available on ANY legal online site yet. If they were exclusively on iTunes that would draw a noticable number of people to iTunes/ACC/iPod.
THAT's the big deal.
But as someone else said, they don't own the Beatles music anymore. There's really no way that would have ANYTHING to do with this lawsuit.
So yes, it would be great to get the Beatles music exclusively on iTunes...but no, that has nothing to do with this lawsuit.
Tue Sep 14, 2004 5:25 pm Subject: Apple Corps = SCO
QuoteGuest wrote:
I thought Michael Jackson owned the right to the Beatles music.
Here's the story behind Michael:
http://www.straightdope.com/classics/a951027.html
But that article is from 1995. I'm nearly certain he has sold them since then to pay off his debt. Someone in here said Sony owns it...I'm not sure that's true, but I have no reason to NOT believe that...
SONY/ATV DO NOT OWN THE BEATLES RECORDINGS!!! Just the songs--there's a difference.
Please learn the difference between publishing companies and record labels. If you want to use Revolution No. 9 in your film, you pay a synchronization royalty to the publishing company. If you want to record a cover of Mean Mr. Mustard, you pay the publishing company. If you want to sell Everybody's Got Something To Hide Except Me and My Monkey on your online store, you have to get permission from the RECORD LABEL.
It's the Beatles' record label, EMI, who own the Beatles' recordings. They could let Apple sell the Beatles songs if they wanted to, but have decided to wait for the Beatles' (and their representatives') permission.
So yes, THE BEATLES THEMSELVES ARE IN CONTROL OF THIS DECISION!
Setteling is not a deal, guys. Setteling does nolt mean Apple Comp. gets something out of the bargain. A settlement means that Apple Corp. whines so much that Apple Comp. pays them a stupid-huge amount of money to sit down, shut up, and go away. Thats it. Thats all a settlement is. Shutup money.
Tue Sep 14, 2004 10:04 pm Subject: And who really cares?
OK, in their day the Beatles were the voice of their generation, they were great, they made history, blah, blah, blah. That was what? Thirty years ago? So, what have they done lately? I have most of their recording on vinyl. I never did buy a single recording on CD. Never even considered it. Their sound is SO dated and irrelevant today. In my opinion, please read again, in my opinion, it would be no great loss if the Beatles never made it to downloadable, digital form.
Tue Sep 14, 2004 10:33 pm Subject: Who cares about the Beatles on iTMS?!? Doesn't everyone who.
Tue Sep 14, 2004 11:30 pm Subject: Here's why...
The issue is what would a UK court do? What harm has Apple Corps encountered by Apple Computer delivering the iPod, software and services?
The only thing I can see so far is that they (Apple Corps) have some international attention, which ain't too bad because they have not been the hottest thing in the business for a while.
I would hope that a UK judge make Apple Corps show that they have encountered damages from the iPod and TMS. There is really no reason to anticipate Apple Computer facing HUGE awards unless there have been significant damages. It seems even harder to claim financial damages when you refuse the potential revenues from being sold on the most successful internet music store in the world.
Personally I don't think I would settle right now - way too early - but I might work out a reasonable agreement to get exclusive rights. I would keep the songs at 99 cents and the "settlement" would cover any additional profits the Beatles might expect form electronic downloads.
Wed Sep 15, 2004 1:00 am Subject: michael jackson bought the beatles catalog for $400.million
Wed Sep 15, 2004 1:05 am Subject:
This is IMHO pre-trial posturing. The heat always gets heavy before the beginning of the trial. If there's enough press on the matter investors begin to take notice and get concerned pressuring Apple to settle the dispute quickly.
I dicount the story becuase in order to get a "mind boggling judgement" Apple Corps would have to prove they have been harmed and prove it in financial terms.