Apple-Beatles: the long and winding road to settlement

IPod and iTunes parent Apple Inc. has settled a trademark dispute with the Beatles, ending an issue that has resurfaced multiple times during the past two decades and perhaps setting the stage for digital distribution of the Fab Four's music.

The settlement announced Monday has the computermaker getting all trademarks related to "Apple" while also licensing certain ones back to Apple Corps, the entity founded by Paul McCartney, John Lennon, George Harrison and Ringo Starr in 1968 to guard the commercial interests of their band.

The Apple vs. Apple dispute first erupted in 1978 and was temporarily settled when the computermaker reportedly paid Apple Corps about $80,000 and promised not to enter the music business. It flared up 13 years later when Apple Corps charged that Apple Inc. was breaching its agreement by selling Macintosh computers with MIDI software, an acronym for musical instrument digital interface. The computermaker settled with another promise and $26.5 million in 1991; Monday's deal supplants that settlement.

Financial terms of the new deal were not disclosed except that each party will pay its own legal costs.

"We love the Beatles," Apple Inc. CEO Steve Jobs said. "And it has been painful being at odds with them over these trademarks. 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."

The announcement comes after months of speculation that EMI Group, which has owned the Beatles recordings for four decades, was getting ready to sell the band's music over the Internet for the first time.

The Beatles are the music industry's most notable holdouts, not yet allowing digital distribution of their songs either on iTunes or its competitors. Observers said Monday's agreement likely will change that.

"EMI has been in ongoing discussions with Apple Corps to get the Beatles to make their music available in a digital music format," EMI spokeswoman Jeanne Meyer said Monday. And three months ago David Munns, a former top executive at EMI, said that Beatles music would be offered for digital download "soon."

Meyer said that any agreement to sell Beatles songs over the Internet would require the blessing of Apple Corps.

"The years ahead are going to be very exciting times for us," Apple Corps manager Neil Aspinall said. "We wish Apple Inc. every success and look forward to many years of peaceful cooperation with them."