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McCartney Rumored Apple Board Member In "Mind Boggling" Beatles Settlement

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.

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