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The Beatles vs. Apple, part III

Kicks off today

Apple Computer will face another legal challenge today, as Apple Corps, the company representing the Beatles, alleges in a London court that the sale of music through iTunes violates a 1991 agreement restricting how the computer maker would use its logo.

Apple Corps says those restrictions prevent the computer company from using its logo for the popular iTunes Music Store, which sells songs over the internet.

Apple Computer says it is allowed to run a data transfer service under the agreement, but Apple Corps contends that the computer company was not permitted to sell music.

The two firms have had long-standing quarrels over the fruit logo. Apple Corps uses a green apple, while the computer company has used black, grey and rainbow-colored apples with a distinctive bite mark.

In Apple Computer's early days, Apple Corps sued over trademark disagreements. In 1989, Apple Corps sued again, and the computer company settled out of court in 1990, paying about $25m (approximately £14.3m). The two signed an agreement in October 1991 defining the use of the Apple Computer logos at the centre of the current dispute.

A settlement may be the easiest route for Apple Computer, whose iTunes Music Store continues to hold a worldwide market share of about 70 percent for downloaded music. Apple Computer announced in February that it had sold one billion songs on iTunes.

But selling music is only mildly profitable for Apple Computer. Music sales act as a lure for its line of music players. It's estimated that iTunes generates revenue for the company of around $0.33 (£0.20) per track, a sum quickly gobbled up by overheads for running the service, said Jonathan Arber, analyst at Ovum. The company won't reveal specific revenue figures related to iTunes, he said.

The two living Beatles, Ringo Starr and Paul McCartney, and the widows of George Harrison and John Lennon have not authorised Beatles songs to be distributed online through iTunes.

Apple Corps and Apple Computer could not be reached for comment yesterday.

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