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Apple vs Apple: 'mind boggling' pay-out imminent - report

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Apple Corp. and Apple Comp. - aka the Beatles and the maker of the Mac - are reported to be on the verge of ending their legal dispute over the latter's right to operate in the music market.

According to a Variety magazine report that mentions "word among the legal community", the two Apples are close to reaching an out-of-court settlement.

And the feeling among the briefs spoken to by the magazine, it claims, is that Apple Comp. is going to have to stump up a very significant sum to the Fab... er... Two.

"People are expecting this to be the biggest settlement anywhere in legal history, outside of a class action suit," said one lawyer. "The numbers could be mind boggling."

To date, Apple Corp. has sued Apple Comp. twice, each time successfully. In the early 1980s, the two were at legal loggerheads over the use of the word 'Apple'. Comp. settled with Corp. and agreed to pay a large sum of money and never to enter the music market. The Beatles' label sued again in the late 1980s, claiming Apple Comp.'s QuickTime multimedia software violated the earlier agreement. Once again, Comp. coughed up a tidy sum - $26.5m - and agreed it wouldn't enter the music business.

Now, with Apple's iTunes Music Store successfully launched, Apple Corp. has yet again alleged the iPod maker has violated their no-music agreement. Apple Comp. maintains that iTunes lies beyond the scope of the restrictions previously agreed upon.

That certainly appears the only way Apple Comp. can argue that it hasn't broken its promise to Apple Corp. Getting into the recorded music retail arena would strike most people as marching into a territory in which the Beatles might well claim ownership of the word 'Apple'.

Apple Comp. has attempted to shift the branding of its music store to iTunes rather than its own name - the European stores are run by a company called 'iTunes SArL', registered in Luxembourg for tax reasons and wholly owned by Apple Comp.

In addition to a monster pay-out, speculation about the Apple-Apple settlement centres on Paul McCartney taking a seat on Apple Comp.'s board or the Corp. taking a wodge of Comp. shares. Some shareholders have called for Apple Comp. to spin off its iTunes division, and such a settlement could prompt such a move, though we doubt Apple Comp. would be happy with such a move. ®

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