So selling music online does not violate a deal which “forbade Apple [Computer] from distributing music on physical media such as CDs or cassette tapes”. Wow… if only that has been a Supreme Court decision here in the US. That would have made the Napster case much more interesting. Sounds like Apple Corps should have gotten into the online music sales business and made it part of the settlement before iTunes happened.

Ouch.

Apple wins Beatles battle | CNET News.com

The High Court in London on Monday ruled that Apple Computer is not liable for trademark infringement because the use of the Apple logo on its iTunes Music Store was not associated with the music it was selling and thus did not breach a previous settlement between the companies.

Apple Corps had sued the Mac maker, claiming that the launch of the iTunes online music store overstepped the boundaries set out in a 1991 settlement for how each company could use their shared brand. The record label sought damages and asked that Apple Computer stop using its name and fruit-shaped logo for selling music online.

During the trial, Apple Corps argued that downloading music is the same as buying a record in a store, while Apple Computer argued that the iTunes Music Store is essentially a means of transmitting data.

Legal experts predicted in March, when the trial began, that the case would end with Apple Computer paying out a multimillion-dollar settlement to Apple Corps, as it did in 1991.

That settlement carved up the areas where each company could use their respective Apple brands. The agreement forbade Apple from distributing music on physical media such as CDs or cassette tapes, but it was not clear whether this extended to the distribution of digital music over the Internet.

The 1991 settlement followed a deal in 1981 stipulating that Apple Computer must stay out of the music business.