Summary:
Apple Corps, owned by the Beatles, and Apple Computer, Inc., now Apple Inc., have undergone a decades-long trademark infringement odyssey. Three lawsuits, many motions, and a venue move across continents show how technology can change trademark protections. How can consumer survey use stand the test of time?
The Core of the Problem
Apple Corps is the holding company, publisher, and protector of music by the Beatles, plus the creative legacy of the band’s members. Apple Corps was founded in the late 1960s by founding members of the Beatles. Its logo is a granny smith apple, inspired by a Magritte painting. Apple Computer is a global telecommunications corporation, now called Apple, Inc., founded by Steve Jobs in the late 1970s. Apple Computer was one of the first to manufacture and sell personal computers as we understand them today, and grew to develop many more products. The Apple Computer logo was also an image of an apple, although in silhouette. Since both trademarks share an Apple trademark and name, disputes about consumer confusion arose between the companies.
Who Took the First Bite?
Apple Corps filed suit against Apple Computer for trademark infringement in 1978. The case included allegations that Apple Computer was infringing Apple Corps trademarks by using the name Apple and its apple silhouette logo. This first case was settled for $80,000 in 1981. The parties also made an agreement, in which Apple Corps agreed not to enter the computer business and Apple Computer agreed not to enter the music business. At this time, consumers of music were shopping in music stores for recorded media, including media from Apple Corps, and computer fans were shopping in electronics stores for personal computers from Apple Computer.
As the personal computer gained more capabilities and grew to hold more than documents, Apple Computer added MIDI (Musical Instrument Digital Interface), a technical standard that allowed users to record, edit, and play music, to its computers. It also added an advanced Ensoniq 5503 DOC chip to Apple computers. In response, Apple Corps filed another trademark infringement suit in 1986, claiming that Apple Computer violated the terms of the prior agreement by entering the music production business.
The case settled in 1991 for $26.5 million, plus a new agreement between the companies. Apple Corps had the right to use “Apple” trademarks on creative works whose principal content is music, and Apple Computer had the right to use Apple trademarks on “goods or services…used to reproduce, run, play or deliver such content.” This did not include content distributed on physical media–which is how most consumers purchased music in 1991.
You Say You Want A Revolution
But consumer music–buying habits changed by 2001, with the introduction of the World Wide Web and music streaming. Apple Computer played a part in this revolution, and with the introduction of the iTunes software and the iPod in the early 2000s, Apple and Apple were at odds again. (They weren’t the only ones; numerous creative entities and record labels went to court over their intellectual property during this era.)
Apple Corps filed another breach of contract lawsuit against Apple Computer for using an apple trademark to create and operate its iTunes Music Store. Apple Corps claimed that it was a violation of their 1991 agreement that Apple Computer would not distribute music. After a venue change from California to the UK, the UK High Court of Justice ruled in favor of Apple Computer. The judge focused on section 4.3 of that agreement:
4.3 The parties acknowledge that certain goods and services within the Apple Computer Field of Use are capable of delivering content within the Apple Corps Field of Use. In such case, even though Apple Corps shall have the exclusive right to use or authorize others to use the Apple Corps Marks on or in connection with content within subsection 1.3(i) or (ii) [the Apple Corps catalogue and any future music], Apple Computers shall have the exclusive right to use or authorize others to use the Apple Computer Marks on or in connection with goods or services within subsection 1.2 [Apple Computer Field of Use] (such as software, hardware or broadcasting services) used to reproduce, run, play or otherwise deliver such content provided it shall not use or authorize others to use the Apple Computer Marks on or in connection with physical media delivering pre-recorded content within subsection 1.3(i) or (ii) (such as a compact disc of the Rolling Stones music).
The judge ruled that Apple Computer had the right to distribute digital music. Apple Corps appealed this decision, but the two companies ultimately settled their trademark dispute with a new agreement. In this settlement, Apple Computer–now Apple Inc.–received all the trademark rights in “Apple,” but licensed rights back to Apple Corps. The terms of the settlement, including financial terms, were confidential, but each party bore its own legal costs. In the years since, music from the Beatles and the band’s members as individuals became available on Apple Inc.’s iTunes store, and there has been no public indication of further litigation over the trademarks.
Apples to Apples: Trade Dress, Dilution, Strength of Marks and Technology
How do consumer surveys help resolve trademark disputes, during a revolution in how we use computers and consume music? In the decades following the Beatles’ founding of their record label and associated assets under Apple Corps, Apple Computer was formed, grew, and eventually trumped Apple Corps in terms of global recognition. As technology and brand recognition changed, so must the ways that infringement must be measured in terms of evidence of consumer confusion.
During the original 1981 case alleging trademark infringement, Apple Corps was likely the more famous party. Because of that, the parties would have been more likely to use a forward confusion survey to measure any consumer confusion or perceived affiliation between Apple Corps and Apple Computer. A forward confusion survey measures whether consumers believe the junior user–here, Apple Computer–or its products come from the senior user, Apple Corps.
By 2006, however, when Apple Computer products were a household name globally and the core audience for the Beatles was older, a reverse confusion survey would likely have been more useful. This survey would have measured whether consumers believed Apple Corps, the senior user, was affiliated or connected with Apple Computer.
Indicate Precisely What You Mean to Say
These two Apples have been iconic symbols at different times. One is associated with one of the most famous bands in English-language pop music; the other is an enormous global technology company. The legacy of these cases shows how intellectual property protections necessarily evolve as a result of technological change–and how trademark surveys must keep up.
If a modern dispute like the Apple case were to arise, surveys could be used to measure consumer confusion–forward or reverse. If one brand accused the other of blurring the distinction between the two, a dilution survey could also be useful in determining whether consumers associate the brands. Because a mark must be widely recognized to support a dilution claim, this may also require a fame or awareness survey. And if one of the parties wants sole ownership of the trademark, it may argue that the mark has acquired a secondary meaning in the market. This would be boosted by a secondary meaning survey, asking whether consumers associate the mark with one company or more than one.
Courts rely on survey evidence only if the survey was properly designed and conducted. We can see from this series of disputes that with changes to technology, the music industry, and consumer behavior, the protections afforded to Apple Corps changed as well. As technology advances, intellectual property challenges will follow suit, and MMR will meet these challenges with reliable research conducted according to industry best practices.