A Global and Local Outlook
Edited by Irene Calboli and Jacques de Werra
Chapter 10: THE INTERSECTION OF TRADEMARKS, LICENSES AND BANKRUPTCY: ENDING UNCERTAINTIES IN THE LAW
Apple Corps, the record label founded by the Beatles in London, brought an action against Apple Inc., the Silicon Valley-based company over the trademark agreement entered by the parties back in 1991. Apple Inc. paid $26 million to Apple Corps for the coexistence right to use the Apple trademark. The agreement provided that Apple Inc. had the exclusive right to use the Apple trademark in connection with electronic goods, computer software, data processing, and data transmission services, while Apple Corps had the exclusive right to use the Apple trademark ‘on or in connection with any current or future creative work whose principle content was music and/or musical performances, regardless of the means by which those works were recorded, or communicated, whether tangible or intangible’. Both companies coexisted in their distinct fields of use, and each built goodwill in the trademark within their markets. As technologies changed in the digital music business, the two companies’ fields of use grew close to each other’s market, although they did not foresee such a possibility at the time they executed the coexistence agreement. Apple Inc. developed their new products, iPod and iTunes software and music, resulting in litigation brought by Apple Corps for breach of the coexistence agreement. In the litigation, Apple Inc. prevailed, as there was no consumer confusion and no evidence to support the breach argument.
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