Despite being the world’s foremost creator of hip consumer technology and a brand recognized worldwide, Apple has consistently managed to find itself embroiled in seemingly avoidable trademark disputes. As discussed in Hiroko Tabuchi’s New York Times article, "IPad? That’s So 2002," Fujitsu Says, Apple has found itself in another very public trademark dispute. While the latest flap is that created by Apple’s use of iPad with its new tablet computer, it is by no means the first time Apple has been accused of trademark infringement.
In perhaps one of the most well known trademark disputes, Apple Computer sparred with Apple Corps on multiple occasions. Apple Computer’s first dustup with the corporate entity behind the Beatles’ Apple Records record label occurred in 1978 (shortly after the founding of Apple Computer in 1976) when Apple Corps sued Apple Computer for trademark violation. The parties settled that dispute in 1981 with the understanding that Apple Computer would never enter the music industry.
Predictably, in hindsight, Apple Corps filed suit against Apple Computer again eight years after the settlement—this time for violating the original agreement not to enter the music industry.
The 1989 suit was not about iTunes or Apple’s now ubiquitous iPods, which were not yet in the marketplace. The suit instead cited Apple computers capable of music playback and creation which, in the view of Apple Corps, violated the 1981 agreement. The suit again went to court, and the two parties reached a settlement in which Apple Corps reserved the right to sue Apple Computer if the company ever used its name to sell “creative works whose principal content is music.” The agreement cost Apple Computer $26.5 million in addition to its legal costs.
Apple Computer released the iPod and iTunes Music Store in 2001 and 2002 respectively, bringing a third lawsuit from Apple Corps in September of 2003. The case went to court in the UK and the judge found in Apple Computer’s favor, since the company was not marketing music, merely delivering it to customers through its network. On January 9, 2007, the computer company renamed itself Apple Inc. to reflect its role in the consumer electronics and music industry. With Apple Inc.’s rights with respect to use of its name in the music industry still limited despite the favorable ruling the in the UK, the two companies once again entered into negotiations and reached what appears to be a final agreement concerning the use of the name Apple in 2007.
Though it is arguable that Apple could never have anticipated its presence in the music industry when it first adopted the Apple Computer name, the Apple v. Apple history nonetheless teaches the importance of thinking with long terms strategy in mind when selecting a mark—including the thoughtful consideration of factors such as anticipated expansion of product line and industry. This sort of care and foresight is especially important during these times in which technology and economic factors seem be driving established companies into new product and service arenas, whether directly or through licensing. Google is now in the cell phone business, first with a software platform on a phone bearing the licensed Lucasfilm trademark (DROID) with Star Wars roots, and then with a phone with a name which may be asking for a trademark infringement complaint (Nexus One).
With all of Apple’s past problems, it is particularly surprising, at first blush, that it would have chosen a product name already adopted by a competitor for a similar product; namely, Fujitsu’s use of iPad with a “hand-held computing device for wireless networking in a retail environment”. To some extent, however, Apple invited these problems back when it first started branding its expanding product lines with names using the then arguably nondistinctive “i” prefix. Apple ran into trademark issues with both the iPhone and, to a lesser extent, the iPod.
Inviting trademark infringement claims is not an inexpensive habit. From the limited settlement information which has been made public, Apple Inc. is estimated to have spent hundreds of millions in litigating and settling with Apple Corps over the years. Though some believe Apple may benefit from the additional publicity and name recognition created by the latest trademark dispute, not every company can afford such publicity.