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Daniel Counsell never thought that Apple would notice his Web site, realmacs.com. The 23-year-old Londoner and Macintosh aficionado launched the site about three years ago, matching its style to that of Apple’s own Web pages. “Their stuff is so stylized, and everybody seems to like the way they look,” he explains. Counsell has a day job as a Web designer, but in his spare time he developed several Mac-compatible software programs, including Aquamatic and Button Builder, which he offered on his site. With them, users can alter the look of their Mac desktop — something Apple says is anathema to the Mac experience. According to Counsell, about 20,000 people downloaded these “freeware” applications. In late 2000, he started to charge $10 for his software; about 1,500 people paid up. But last January he got a jolt in the mail: a stern letter from Apple’s intellectual property counsel, Arent Fox Kintner Plotkin & Kahn in Washington, D.C., directing him to cease and desist sale and distribution of his software. “While Apple appreciates your enthusiasm for the company and its products, you should be aware that by publishing and distributing the Aquamatic shareware, you are infringing Apple’s copyrights and trademarks, and engaging in acts of trade dress infringement and unfair competition,” it said. Although he thought Apple was wrong, Counsell “didn’t really fancy going up against them,” he says. He removed the software from his site. Counsell’s story is not unique. According to Nancy Heinen, senior vice president and general counsel at Apple, the law department monitors over 30 trade and fan sites that publish information about company products. Heinen declined to speak further about Apple’s IP practices, but few of those cease-and-desist letters have led to legal action. These sites, such as Macrumors.com, are produced and read by Apple’s most fanatic customers. Their dedication has been both a blessing and a curse for the Cupertino, Calif.-based company. The sites’ championing of the Macintosh helped maintain sales of the computer in the mid-1990s, when Apple lost market share to computers running Microsoft’s Windows system. (Macs now account for only about 5 percent of the PC market.) But the sites’ interest in forthcoming products seems to irk company cofounder and CEO Steve Jobs. Although Jobs declined to speak with Corporate Counsel, he was quoted in a recent interview with Fortunemagazine touting the company’s intellectual capital: “We know how expensive it is to develop [IP], and so we really believe in protecting it.” According to Rob Enderle, a research analyst with Cambridge, Massachusetts-based Giga Information Group, Inc., Apple is unique among computer makers in that it doesn’t brief reporters or analysts prior to new product launches. “They keep the information very close to the vest,” he says. For Jobs — and for Apple’s lawyers — the Web presents a major challenge to this strategy. On it, strangers can speculate publicly and in detail about products the company is poised to release. Occasional unauthorized leaks or photos draw cease-and-desist letters. The online anticipation becomes particularly frenzied in January and July, before the company unveils new products at the semiannual MacWorld conventions. But in this crowd, receiving a cease-and-desist letter from Apple is a stamp of authenticity. The upshot of all of this is that ordinary individuals are now subject to serious legal actions that used to be unleashed only on company spies. In fact, the laws that back up these actions were written with companies in mind, to prevent unfair competition, not to stifle consumers. “It’s hard to stamp something like this out,” says Enderle. “It’s kind of like putting out a prairie fire in a drought.” But maybe Apple protests too much. If anything, the fan sites — and the company’s overheated reactions — create more “buzz.” It works for movie and pop stars — and, apparently, for Apple.
Apple Computer, Inc.
Number of Federal Trademark Lawsuits as Plaintiff: 1994 – 1 1995 – 2 1999 – 1 2001 – 1 Number of Federal Trademark Lawsuits as Defendant: 1998 – 1 1999 – 2 Source: CaseStream
Top Outside Firms for Trademark Suits: O’Melveny & Myers: 3 cases Baker & Hostetler: 2 cases
Headquarters:Cupertino, California
CEO:Steve Jobs
GC:Nancy Heinen
Revenue 2001, in billions:$5.36
Employees:8,500 (approximately)
Share Price 52-week high/low:$27.12/$13.62
Share Price, November 27:$20.71

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