Apples Eat Themselves, Law421

Article Review LAW 421 March 25, 2013 University of Phoenix Material Article Review Format Guide MEMORANDUM UNIVERSITY OF PHOENIX DATE: March 25, 2013 TO: Timothy Morris FROM: Debra Aguilar, Brady Benton, Karena Busch, Stephanie Hudson, and Rachel Wichert RE: Apples Eat Themselves ARTICLE SYNOPSIS A review of the legal battles between Apple, a computer company and Apple, a record company, are discussed in this article. Both share a similar logo (an apple) and since 1991, the companies have gone to court to claim the Apple logo should only be unique to one company.

In 1991 the Court agreed for each company to continue to use the Apple logo but now, the record company has accused the computer company of not conforming to the terms of the agreement. In 1980, George Harrison noticed an apple in an ad for computers. He thought this infringed upon Apple, the Beatles Record company trademark and filed suit. In 1981, Apple Computer agreed to stay out of the music business. In 1991, Apple Corp. filed suit against Apple Computer for trademark infringement again and settled out of court for 26. 5 million dollars. The two companies divided up the apple universe, indicating where each could use the apple symbol.

In 2001, Apple Computer introduced online iTunes Music Store which had a huge impact on the music retail industry. In 2003, Apple Corp. again sued Apple Computer stating music was being stolen from them. Apple Computer was protected because downloads of music are comprised of digital data, and the distribution of digital entertainment content is permitted in the 1991 agreement. Apple computer, now looking from the other side of the dispute, may have issues protecting its own trademark because of current legal action that would force them to share copyright protection software with other companies.

The Computer Giant would be forced to make downloads sold on their site playable on any device, not just its own iPod products. This would result in wide open competition, something Apple Computer has not faced before. The reason Apple Corp sued Apple Computer over thirty years ago was to protect its trademark, and now Apple Computer may find itself in the same situation. LEGAL ISSUE Apple Corp and Apple Computer have had their share of trademark issues. It’s been about thirty years that Apple Corp and Apple Computers litigated a dispute involving the use of the “Apple” name as a trademark and its association with music.

In 1978 Apple Corp filed a law suit against Apple Computers (Apple Inc) for trademark infringement and eventually agreed to a settlement about two years later with Apple Computer paying out a mass amount to Apple Corps. The legal issue Apple Corps raised is that Apple Computer is involved in the music business and that in the 1991 agreement Apple Computer agreed to stay away from the sound recording industry, committing trademark infringement. In 2001 Apple computer released the iPod as a hardware device that can be used to download and play software like music from iTunes.

ITunes was released in 2003. Apple Corps claims that Apple Computer is involved in the sound recording industry by the use of the iPod and the music downloads from iTunes that is in violation of the 1991 agreement in which Apple Computer would not have any business dealings that had to do with the sound recording industry. The High Court ruled that, “The Apple Computer hadn’t breached the terms of the agreement and could continue to operate their computer business as usual. ”(BBC News, 2006). For years Apple Inc has battled with Apple Corp over trademark issues.

In 2007, they finally reached a settlement that determined Apple Inc. would own all trademarks and logos related to the name “Apple” and would license them accordingly to the Apple Corps music company (Tibken, 2012). During the time of the agreement, Apple’s CEO Steve Jobs commenting on the settlement stated “We love The Beatles, and it has been painful being at odds with them over these trademarks. ” Jobs added that “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. MANAGERIAL PERSPECTIVE The legal issues in this article can affect the business deeply. The main factor is the loss they can occur in sales due to the music company saying they are not following the contract they have put forth. This shows customers and people of the world that their company is not trust worthy in all aspects of their business. In many circumstances this can stop people from buying their products until the situation is over and they find out the truth. The issue is that it could take weeks or months to finish the lawsuit.

The problems that have happened with Apple the computer company could have been avoided if they took the correct steps allocated in their agreement with Apple the music company. The first step they should have taken was to sit down and have a business meeting with the representatives from the music company and explain to them what they wanted to do so that the contract could be altered. Instead they did it without coming to an agreement first, which disrespected the music company. Legally this is what should have happened so that the contract was followed and no one broke the contract illegally.

References Macklem, K. (2006, Apr 10). Apples eat themselves. Maclean’s, 119, 30-30. Retrieved from http://search. proquest. com/docview/218528830? accountid=35812 Tibken, S. (2012). Apple now officially owns Beatles’ Apple Corps logo. Retrieved from http://news. cnet. com/8301-13579_3-57540017-37/apple-now-officially-owns-beatles-apple-corps-logo/ BBC News. (2006, May 08). News: Front Page. Retrieved March 20, 2013, from Beatles lose News: Apple Court Battle. Retrieved from http://www. bbc. co. uk/2/hi/entertainment/4750533. stm