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Monday, March 27, 2006, 09:00 am PT (12:00 pm ET)

Round 3: Apple to battle Apple in court this week

For the third time in as many decades, Beatles-owned Apple Corps will duke it out against Apple Computer in court over the latter's rights to do business within the music industry.

As reported by TimesOnline, the two companies will meet in London's High Court on Wednesday, over charges brought by Apple Corps that Apple Computer's iTunes and iTunes Music Store software is in violation of the terms of a previous agreement between the two companies.

Apple Corps is claiming that the introduction of iTunes broke a $26 million settlement from 1991 under which Apple Computer agreed to steer clear of the music business, for which the Beatles’ company retains the famous trademark.

Any damages for this latest clash could amount to tens of millions of pounds, speculates TimesOnline, because it concerns Apple Computer’s hugely successful iTunes Music Store and iPod digital music players.

The Beatles first used a logo of a Granny Smith in 1968 when they founded the Apple Corps — which is still active today — to distribute their records and those of other artists they signed to the Apple record label, the report notes. The records had a ripe apple on one side and a neatly sliced half on the reverse.

Apple Computer chief executive Steve Jobs founded his company in 1976 with a logo of a rainbow-colored apple and was sued five years later by Apple Corps. Jobs and Co. agreed to pay the Beatle's company an $80,000 settlement and promised to stay out of the music business.

In 1989, the companies clashed again after Apple Computer introduced a music-making program. The dispute ended in 1991 with the computer company agreeing to $26 million settlement. As part of the deal, Apple Corps was awarded rights to the name on “creative works whose principal content is music” while Apple Computer was allowed “goods and services . . . used to reproduce, run, play or otherwise deliver such content”.

Critically, the agreement prevents Apple Computer from distributing content on physical media, note TimesOnline. At the time, this was designed to cover CDs and tapes, but it is unclear whether it was meant to cover later inventions such as digital music files or devices used to play them.

Apple Computer is expected to argue that its iTunes service is merely data transmission.