Who has the right to trademark the word “apple,” the Beatles or Apple Inc.? Between 1978 and 2006 there were a number of legal disputes between the music company Apple Corps (owned by The Beatles) and the computer manufacturer Apple Computer (now Apple Inc.) over competing trademark rights. Apple is the largest company in the world based on market value, selling millions of personal computing devices from mp3 players to desktop computers. Apple’s brand is highly regarded with millions of people electing to pay a premium for its products. That is why it should be no surprise that Apple’s brand is ranked number one in the world with a value (104.3 $bil) of almost 2x the size of its closest competitor Microsoft (56.7 $bil). Apple Corps is a multimedia corporation, who was founded in London in 1968 by members of the Beatles to replace their earlier company Beatles Ltd. and to form a conglomerate. The main division of Apple Corps is Apple Records which was launched in the same year.

The legal confrontation started in 1978 when Apple Corps, the holding company of Apple Records, filed a lawsuit against Apple Computer for trademark infringement.  This was settled 3 years later in 1981 for a sum, that some estimated to be $250million however it turned out that the amount was only for $80,000. The agreement the two companies settled upon was that Apple Computer would never enter into the music business and in return Apple Corps would never enter into the computer business.

Eight years after the first settlement, Apple Corps filed suit against Apple Computer again, this time for violating the original agreement not to enter the music industry. The suit cited the Mac Plus, Mac SE, Mac II, Apple IIgs, Apple CD-SC CD-ROM drive, and Apple’s MIDI interface for the IIgs and the Mac. All were capable of music playback and creation (except for the Apple CD-SC) and seemed to infract on the original contract.

In the eyes of Apple Corps, the iTunes Music Store was a clear violation of the 1991 settlement. In September 2003 (25 years after Apple Corps’ first suit)Apple Corps sued Apple Computer for breach of contract simultaneously in the US and the UK. Since the company was not marketing music, merely delivering it to customers through its network.  iTunes distribution format is strictly digital, it sells music that can be played on digital devices such as personal computers and iPods. The songs are downloaded to the digital device so the only physical material is the software itself. Apple Corps was required to pay Apple Computer for its legal fees (estimated at £2m.

On January 9, 2007, the computer company renamed itself Apple Inc. to reflect its role in the consumer electronics and music industry.