Apple and IP Rights

Two bits of news related to Apple this week.

First, on Monday, Apple announced the resolution of its ongoing battle with Apple Corps (the Beatles' record label) with regard to teh use of "Apple" in connection with music. Originally a trademark dispute, the two sides reached an agreement in 1991; however, with the expansion of Apple's business into music and music delivery (via iPod/iTunes), Apple Corps brought suit on an apparent breach of the 1991 settlement. The new settlement gives Apple rights to use "Apple" in connection with music, and licenses the name back to Apple Corps in certain areas. The guess here is that in addition the license rights, Apple Corps received a hefty check. Next step: getting the Beatles' music on iTunes. And then turning to resolution of the Cisco dispute over 'iPhone.'

Second, yesterday Steve Jobs released an open letter calling for a music industry-wide move away from Digitial Rights Management (DRM) software. Jobs states that when Apple went to license music from the major labels, it was required to create, update, and monitor use of the music and protect it via DRM; as the result, music sold through the iTunes store will only work on Apple products (iPods). (Apple argues that providing the 'keys' to permit DRM on third-party products will result, inevitably, in the disclosure of the keys to the public and therefore the 'unlocking' of the DRMs.) Moreover, as Jobs also points out, the labels' sell millions of CDs to the public without any DRM at all. (Apple, by the way, calculates that only 3% of the music currently loaded onto the world's iPods was purchase through the iTunes store; but that 3% still equals 2 billion songs.)

As the leader in portable music (and looking to extend that lead with the iPhone), Apple has the most to benefit from elimination of a DRM regime that seems flawed to begin with; and what is good for Apple, in this case, looks like it would be good for consumers as well.