Apple vs Apple as the Beatles take on computer giant

The Royal Courts of Justice reverberated to the sound of a 1970s disco hit yesterday when the Beatles' record company began a legal battle demanding damages from Apple Computer's music download business.

Apple Corps' barrister chose the tune "Le Freak" by Chic to demonstrate how music downloading works to a High Court judge.

After the rendition of the 1978 classic, Geoffrey Vos, QC, pointed out to Justice Edward Mann how many times Apple Computer's half-eaten apple logo had appeared on the screen while the song transferred from the internet.

Fortunately for the lawyers, Mr Justice Mann confounds the stereotype of an out-of-touch High Court judge - he checked before the hearing that his ownership of an iPod would not disqualify him from the case.

Mr Justice Mann is charged with presiding over a case that renews legal hostilities between two companies that have an iconic place in popular culture.

At stake is Apple Computer's running of its digital downloading service, iTunes, which has more than 70 per cent of the downloads in the US and the UK.

One analyst has estimated that Apple Computer would have to pay £60m to settle the case.

Apple Corps, founded in the 1960s to manage the Beatles' musical interests, claims that its Californian namesake is breaching an agreement to avoid trespassing on its trademark by selling music products.

Apple Computer insists that iTunes cannot be construed as a physical music product - banned under the terms of a 1991 court deal aimed at keeping the Apples in different branches of the business world.

In that deal -which Apple Computer settled by paying $26m (£13m) to the Beatles' company - Apple Corps was awarded rights to the name on "creative works whose principal content is music". Apple Computer, the technology company led by Steve Jobs, was allowed "goods and services ... used to reproduce, run, play or otherwise deliver such content".

Opening the civil case, Mr Vos said peace had reigned between the two companies until the advent of the iPod, the successor to personal tape and CD players such as the Sony Walkman.

Mr Vos said that, for Apple to call its iTunes download system for the iPod just an electronic device was a "perversion" of the agreement between the two companies.

He revisited remarks made by Mr Jobs in his promotion of iTunes that downloading music from the internet was the same as buying a long-playing record in the modern world.

Mr Vos said Apple had violated the agreement by selling music online and its contention that the Apple mark was only used in connection with a delivery system was "plainly wrong".

The public had access to 3.7 million tracks available worldwide and one billion songs had been downloaded from iTunes.

Apple Corps is seeking court orders to stop Computer using the "apple" marks in connection with the iTunes Music Store and damages after an investigation into the US giant's profits.

Mr Vos said that when Jobs launched the iTunes Music Store in 2003, part of the presentation included exclusive tracks from artists including U2, Eminem, Bob Dylan. He told the court: "[Apple] Computer was promoting a store at which to buy music, and more particularly, its musical recordings - permanent downloads - with special characteristics. No objective onlooker could think otherwise."

He said Mr Jobs offered Apple Corps $1m to buy the mark "Apple Records" before the launch - an offer rejected by Neil Aspinall, the Beatles former road manager, who is managing director of Apple Corps.

The case continues.