Opinion: Larry Downes on What the Apple v. Apple Decision Means - ' Musical Conversions '

There can be no doubt that iTunes and the iTunes music store sell songs in the form of "computer software." Nor can there be any doubt that iTunes are music "recorded or communicated" in an "intangible" form. Indeed, Justice Edward Mann, the British judge who has overseen the case thusfar, noted that if the intention of the lawyers who drafted the 1991 agreement was "to create obscurity and difficulty for lawyers to debate in future years, they have succeeded handsomely."

Apple Corps was formed in 1968; Apple Computer was launched in 1976. It's possible that Apple Computer's lawyers thought the 1991 agreement saved the younger company's logos. But as far as we know (the complete 1991 agreement has not been made public, and a spokesperson for Apple Computer was not aware of any later modifications), the companies agreed not to use their respective marks in each other's fields of use until the end of time.

Neither side seems to have considered what would happen if those fields converged, as they so clearly have. Make no mistake: Justice Mann found no silver bullet in the evidence presented by the two companies to make his decision obvious, or his opinion clear. This is a mess, and a mess created by the two companies—or rather, by their lawyers. As the judge put it with trademark British understatement, "The parties cannot have imagined that technology would stand still, even if they could have predicted its direction. [Apple] Computer itself was known for its innovatory propensities."

Ironically, had the parties left themselves to the law of trademarks, which adapts itself quite nicely to changing market conditions and changing consumer perceptions, Apple Corps would be hard-pressed to make any case today.

Unfortunately, an agreement seemingly designed to forever avoid resolving the trademark issue has tied Apple Computer's current management to restrictions on their business that no longer make sense—and that no longer have anything to do with protecting consumers from confusing marks, the source of the conflict in the first place. Once again, technology has undone the work of lawyers unable to see even a few years into the future.

Short-sightedness in this case may prove expensive for Apple Computer, but not in the way most commentators and news reports of the case predict. Up until now, Apple Corps has refused to license any of its catalog—notably, recordings by the Beatles themselves—for digital distribution. At trial, however, Apple Corps admitted it is now remastering in preparation for digital release. iTunes, the first commercially successful digital distributor, would be the natural distribution partner. My guess is that the lawsuit is actually just part of the negotiations.

Following Justice Mann's decision, in fact, a statement from Apple Computer CEO Steve Jobs noted that "We have always loved the Beatles and hopefully we can now work together to get them on the iTunes Music Store." Apple Corp, meanwhile, promised an immediate appeal. Helter-skelter, baby.

Larry Downes is Associate Dean of the UC–Berkeley School of Information. He is the author of Unleashing the Killer App and The Strategy Machine. His next column will appear in July.