Blog author: abradley
by on Wednesday, March 29, 2006
An apple a day…

Here’s an interesting story–Apple Corps is suing Apple Computer for breach of contract. You probably recognize the first Apple as the company owned by Paul McCartney, Ringo Starr, and the widows of the other two Beatles. Since 1991, Apple Corps has had a deal with Apple Computer: in essence, the music company agrees to stay out of the computer and telecommunications business, and the computer company agrees to stay out of the music business–technically, each has agreed to keep its trademark out of the others “field of use.” All was fine and dandy until innovation reared its head: iTunes. Through its iTunes Music Store, Apple Computer now sells over three million songs a day–a success driven largely by the invention of the iPod. Apple Corps claims that Apple Computer has now elbowed in to the former’s “field of use.”

So this brings up an interesting dilemma: when a company like Apple creates something new–in this case, a new distribution system for music–unimaginable in the time when the terms of a particular agreement were set, how does this change the agreement itself? When the two Apples agreed to stay out of one another’s field of use, what happens when one Apple creates a new field that is similar in some ways to the one it promised to stay out of?

…won’t keep the lawyers away.

Of course, I am no lawyer, and cannot say how things ought to play out (any thoughts on this from those who know?). But it is worth noting that the creativity of entrepreneurs–in this case, the creative minds at Apple–can easily disrupt common ways of thinking about particular industries. Markets are not static entites, but we often don’t think that innovation can also change our terms of understanding. This is not a negative. Rather, it shows the multiple powers of human creativity: the thing created also demands the creation of new ways of understanding our world and language.

  • http://www.hubsandspokes.com marc

    It seems to me that the better course of action for Apple Corp. here would be to actually put the Beatles’ catalog onto the iTunes Music Store…

  • http://blog.acton.org/ Jonathan

    And then release a special edition iPod with the entire Beatles catalog on it. And Apple Corp. could share in the profit!