Canada: When It Comes To Sharing Valuable Trade-Marks, Do Not "Let It Be..."

Last Updated: May 23 2006

Apple Corps (TM) v. Apple Computer (TM)

An important decision has been rendered by the High Court of Justice in London in Apple Corps Limited v. Apple Computer, Inc. The case deals with a claim brought by Apple Corps for breach of a 1991 Trade-Mark [TMA] Agreement by which they agreed as to how they would use their respective "similar" marks in their respective fields of commercial activities.

As the case exemplifies, rapid technological changes can render the intended terms of a TMA either obsolete or insufficient to deal with change. Here, Apple Computer was recognized the right to expand the scope of its limited rights to the marks even if it was clear that this was not Apple Corps' intent in 1991.

Apple Corps is the record company synonymous with the Beatles. Apple Corps has been known under this corporate name since 1968. The apple mark both as a word and as a graphic symbol became an essential part of its business. The symbol is a sideways view of the whole apple.

Apple Computer, Inc. was founded in 1976. It started producing computers under the Apple mark at the end of the 1970s. It has adopted, to conduct business, the word "Apple" and a stylized apple with a bite taken out of it.

An original agreement of coexistence between the parties was entered into in 1981 but did not allow for the parties to develop their own businesses as they had anticipated. Apple Corps Limited took injunctive relief against Apple Computer, Inc. and, after obtaining interlocutory injunctive relief, entered into a settlement agreement and TMA in 1991. The first clause of the TMA summarizes its essence:

"Whereas, the context in which this Agreement arises is the parties' desire to reserve for Apple Corp's field of use for its trade-marks, the record business, the Beatles, Apple Corp's catalog and artists and related material all as set forth in section 1.3 herein and to reserve for Apple Computer's field of use for its trade-marks, the computer, data processing and telecommunications business as set forth in section 1.2 herein and to co-ordinate the use of their respective trade-marks in such fields of use as set forth in section 4 herein."

The parties' respective marks were defined as follows:

"Apple Computer Marks" means any design, reproduction or other depiction of an apple, in whole or in part, except for a whole green apple or a half apple of any color(s) and the word "Apple".

"Apple Corps Marks" means any design, reproduction or the depiction of an apple, in whole or in part, except a "rainbow" or multicolour striped apple, in whole or in part, or any apple of any color(s) with a "bite" removed, and the words "Apple" and "Zapple".

The parties' respective rights to use the trade-marks were divided according to the parties' respective fields of activities acting as boundaries.

The Dispute

The introduction of the extraordinarily successful iTunes software primarily in association with the iPodT and iTunes music store led to the present dispute over the TMA.

The Court engaged in a detailed analysis of the interaction between the iTunes software process and web notices and the use of the apple logo and word. According to Apple Corps, "it is what happens when the iTunes music store is accessed" which constitutes infringement of the TMA. When accessing iTunes, for the purpose of downloading music, the apple symbol, and, at times, the words "Apple music" appear at different times, as if such associations were a pattern. Did the 1991 TMA change the parties' exclusive fields of use agreed upon in their 1981 agreement so that, after the TMA, Apple Computer was entitled to a wider-ranging field of use in relation to delivery services? The TMA did preserve an important boundary line between the parties' permitted fields of use and musical content. Musical content, according to Apple Corps, was always to remain its exclusive preserve and the question was now for the Court to determine whether Apple Computer crossed that boundary.

The use of the concept of "musical content" in the TMA was to become an important factor for the Court to conclude that the 1991 TM had lessened Apple Corps' exclusive rights to the apple mark for musical content. Apple Computer's main argument is that while the apple mark covers the pages accessible through the iTunes software, such mark is not used with a musical content, namely the musical downloads which users can access through the iTunes software. In order to defeat this argument, Apple Corps had to dissect the entire process through which a user accesses content through iTunes. Encryption, protected access, burning time, bits and other highly technical computer concepts were presented by Apple Corps in an effort to establish that Apple Computer was infringing on its exclusive trademark rights by engaging in the field of content provision in association with an Apple mark. Musical content is anything that is recorded music and Apple Corps believes that iTunes was a tool used in association with the restricted mark which were part of the field of recorded music.

The interpretation of the TMA requires a determination of the scope of the words "on or in connection with" in relation to usage of the Apple marks. The Court would consider whether the mark is used by iTunes to suggest a "relevant trade connection with the recorded work". And even if it is, is this "fair use" by Apple Computer as part of the download service.

The Court Decision

The Court notes that such a trade-mark agreement must be interpreted by returning to the parties' knowledge and minds at the time the TMA is entered into. Rapid technological advances should not be presumed to have been known or anticipated and may not have a role to play in interpreting the scope of restricted activities with respect to a mark which is shared.

The Court stated that the purpose of a mark is to guarantee commercial origin to consumers. This limitation was used by the Court to construe the proper scope of the TMA. The court concluded that Apple Computer has the right to use the apple mark in connection with a service which sells musical content as long as it is acting fairly and reasonably. The primary association is between the apple logo and the music store, not the musical content. Apple Corps retains the exclusive right to apply its Apple marks to musical recordings, including recordings transmitted in an intangible form (over the internet).

Apple Computer was therefore successful in proving that the marks and logo are not used in association with "musical content" but only with respect to the services giving access to such content.

When the owner of a trade-mark agrees to coexist with another user of a confusing trade-mark, this agreement should be carefully drafted in order to create clear boundaries, shielded from the pervasive effect of rapid technological change.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions