The Beatles' record label Apple Corps has accused Apple Computer in court of breaching a trademark agreement by selling music.
Both companies reached a deal over the use of the apple trademark in 1991, which stopped Apple Computer from entering the music business.
But Apple Corps claims the US company's online iTunes Music Store has broken the agreement.
The hearing opened at the High Court in London on Wednesday.
Apple Corps, owned by former Beatles stars Sir Paul McCartney, Ringo Starr and the widows of John Lennon and George Harrison, was founded in 1968.
Apple Computer, the firm whose home computers helped launch the personal computer industry, was founded in 1976.
Geoffrey Vos QC, representing Apple Corps, said the computer firm had been keen to use the Apple brand on its Music Store and offered to buy the rights from Apple Corps for $1m (Â£576,500) just before iTunes launched.
The offer was rejected by Neil Aspinall, Apple Corps' managing director.
Mr Vos claimed Apple Computer founder Steve Jobs had said downloading music from the internet was now no different from buying a record.
He argued the US computing giant violated the deal by selling music online and its argument that it used the apple mark only in connection with a delivery system was "plainly wrong".
Mr Vos told the court that calling iTunes a mere electronic device was a "perversion" of the 1991 deal.
He added that the Apple logo was prominent on the iTunes website and almost every advert for it carried the logo.
Mr Vos said: "[Apple] Computer was promoting a store at which to buy music, and more particularly, Computer's musical recordings - permanent downloads - with special characteristics.
"No objective onlooker could think otherwise."
Full story: http://news.bbc.co.uk/1/hi/entertainment/4854408.stm
I personally think the Apple music service breaks the agreement as music distribution is music distribution regardless of format. They are just trying to get around it as digital music distribution didn't exist when they made the agreement.
Apple are certainly getting it in the neck on this side of the pond.