14 May 2014 4 min read

With a value worth around $465 billion and as the most valuable company in the US, there are certainly many ‘lessons’ companies would like to learn from Apple. Yet, whilst the world has seen the rapid growth of Apple products (with a reported 47.8 million iPhones sold in just one quarter of 2013) this growth has not been without its legal battles. In the tech-focused era today, it is important for companies to see how the tech ‘giants’ such as Apple have ‘actively and aggressively’ protected their intellectual property rights through litigation both in the UK and the US.

Apple Computer inc v. Apple corps – 1978 – 2007

The on and off litigation spanning 30 years with the Beatles-founded record label Apple Corps seemingly teaches us the lesson ‘don’t make a promise you can’t keep’ with regards to developing new technology.

  • Where it all began
  • In 1978, before the era of iPhones, iPads, and iPods, Apple brought their computer technology to the UK. The famous Beatles record label went against this new technology company for infringement of trade mark, resulting in a settlement 3 years later requiring Apple to pay Apple Corps $80,000 with an agreement to stay out the music business. 
  • Breaking promises
  • In 1991, before playing music from miniscule devices was regarded as a standard feature of technology, Apple Computers launched Macs containing chips that allowed music to be played – a technological feat that in fact cost Apple Computers $26.5 million in a payout to Apple Corps as a result of infringing their previous agreement.

‘Distribution network’

  • 2003 saw the introduction of the iPod, and iTunes store; whilst both are obviously extremely successful now, Apple Corps sought to prove another infringement of their 1978 agreement arguing that both products were an entry into the music business. Despite the obvious music connection, the High Court ruled in 2006 that Apple were in fact keeping their promises, as the developments actually constituted a ‘distribution network’ and therefore there was no trade mark infringement.
  • Resolution
  • Given the role of Apple products such as iTunes and iPods at the forefront of music today, it seems sensible that in 2007 both parties announced a settlement that would remove the 1978 promise as a barrier to music development for Apple products as they agreed that Apple would own all trademarks related ‘Apple’, yet they would licence certain trademarks back to Apple Corps for their use. 

Apple Computer inc. V emachines 1999[1]

Whilst the term ‘Mac’ now tends to refer to slim-line laptops, in 1998 Apple created the iMac computer that proved popular. Yet, it would appear eMachines had a similar idea whereby they introduced the eOne that looked like, and performed similarly to, the iMac, yet with a price tag of $400 less. Successfully shutting down sales of eOne by taking them to court citing a ‘trade dress’ infringement (similar to the tort of ‘passing off’ in the UK). This litigation shows the need to be aware of the power that large companies wield, particularly when developing products. It is certainly a wise idea to seek legal advice early on when dealing with large companies such as Apple; which tend not to be very forgiving when trade mark issues are at stake!

Samsung Electronics (UK) Limited -v- Apple inc 2012

In this rather remarkable High Court case the judge stated that there was no likelihood of confusion between the Samsung Galaxy Tablet and the Apple iPad, because the Tablet was ‘not as cool’. Following this decision that the Samsung product did not infringe the RCD of the Apple product (a European Union design right), the judge refused to grant an injunction which would have prevented Apple from claiming that Samsung did, in fact, infringe such a right. Additionally he ruled that Apple must place adverts in UK papers and websites to announce the findings , by the court, of non-infringement. 

Therefore, whilst companies can hope to protect their freedom of speech by avoiding an injunction following infringement proceedings, the use of orders (such as the one given to Apple) do raise awareness of the consequences of such infringement proceedings which may halt sales and the development of the product.

Overall, whilst not every company will be as much of a ‘giant’ as Apple, their various instances of litigation do serve to illustrate the importance of seeking legal advice as early as possible. In the current climate of rapid technological innovation, it is of paramount importance that ideas and developments are properly protected and scrutinized for any potential legal issues that may arise. 

The contents of this article are intended solely for information purposes only and should not be construed as legal advice or opinion in any specific facts or circumstances.

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Ryan Lisk

Ryan has helped a vast number of businesses protect and control their intellectual property as well as drafting and advising on consumer and commercial contracts.

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