Beatles Win Round In Apple Battle

A British High Court judge ruled Wednesday that a trademark battle between Apple Computer Inc. and The Beatles' record company Apple Corps Ltd. should be heard in London.

Judge Martin Mann rejected an argument by Cupertino, Calif.-based Apple Computer that the case should be tried on its home territory. He didn't set a trial date but granted the U.S. technology giant permission to appeal the decision.

Apple Corps Ltd., the Fab Four's record company, is suing Apple Computer, claiming the American company violated a 1991 agreement by entering the music business with its iTunes online store.

The 1991 pact, in which each side agreed not to tread on the other's toes by entering into an exclusive "field of use" of the Apple mark, was signed after a long-running multimillion dollar trademark fight between the companies.

The current lawsuit by London-based Apple Corps — founded in 1968 and owned by surviving Beatles Paul McCartney and Ringo Starr, the widow of John Lennon and the estate of George Harrison — seeks an injunction to enforce the 1991 agreement, and monetary damages for the alleged contract breach.

Mann, who confessed during the hearing that he owned an Apple Computer iPod digital music player, gave several reasons for his judgment, including the fact that the trademark agreement was governed by English law and that a trial in California would likely be longer and more costly than a hearing in England.

Mann was told that the iTunes Music Store, which enables users to download and save thousands of prerecorded songs from the Internet, is currently available to Apple users in the United States only, but that its introduction to Europe is imminent.

The service has sold more than 10 million songs at 99 cents each since its April 2003 launch and is central to Apple's strategy to promote its computers as digital entertainment hubs.

It has generally been welcomed by record companies because of the fee — as opposed to the criticism leveled at "free for all" Internet sites — but it carries no songs by The Beatles because Apple Corps has yet to authorize distribution.

The Beatles sued Apple Computer over the corporate name in 1981, four years after Steve Jobs co-founded Apple Computer. He is said to have chosen the name in part as a tribute to The Beatles.

The 1981 case ended after the tech company paid The Beatles' company an undisclosed amount of money and agreed to use the name only for computer products.

A decade later, The Beatles sued again, alleging Apple Computer was violating the initial agreement by using its Apple logo on music-synthesizing products. The case was settled out of court with Apple Computer paying an undisclosed amount to The Beatles' company and signing the agreement around which the latest lawsuit revolves.

Terms of the 1991 settlement were kept confidential, with Apple Computer allotting $38 million at the time to settle the litigation.