Settlement of the Apple Computer versus Apple Corps lawsuit may make legal history – as the largest settlement ever made, except in a class action, reports claim.

Forbes speculates the settlement may even see former Beatle Paul McCartney taking a seat on Apple's board, and Apple Corps grabbing a large, but unspecified, chunk of Apple Computer's shares.

The Beatles' company, Apple Corps., is litigating against the Californian computer maker, alleging that it broke a 1991 agreement. In 1991, the companies agreed to share the trademark of the term, Apple, but Apple Computer was forbidden to use the name in any use "whose principle content is music". Apple Computer also paid Apple Corps. $26.5 million in an out of court settlement of the case.

Trademark case history

Apple Corps launched the current legal action against Apple Computer in September 2003, arguing that it had broken that deal by launching its iTunes Music Store and iPod products.

Speaking with The Independent in September 2003, Apple CEO Steve Jobs said: "Apple Corporation and Apple signed a legal agreement more than a decade ago".

"I wasn't at Apple at that time, and it says what each company can do with their trademark. I inherited that, and right now there's a disagreement about this. It's a trademark dispute. We might have to get a judge to decide on it."

A September statement from Apple Corps issued through the Press Association said: "Specifically, the complaint is made over the use by Apple Computer of the word "Apple" and apple logos in conjunction with its new application for downloading pre-recorded music from the Internet," said spokesman Geoff Baker.

Speaking in the UK court before an iPod-owning judge, Apple disagreed, arguing that its services are digital data transmission services – in the spirit of the 1991 agreement.

'Mind-boggling' settlement?

Forbes reports that the new out of court settlement will, "massively dwarf" the 1991 $26.5 million payment. The two antagonists have reportedly already spent in excess of £500,000 each bringing the case to the courts.

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

Beatles come to iTunes?

News of a settlement also emerges as the digital music distribution industry becomes more competitive, with previous reports claiming Beatles' representatives to be in discussion with numerous vendors to make the band's songs available for sale online.

These reports claimed representatives of The Beatles to be asking for a considerable sum in return for exclusive online distribution rights. Speculation exists that offering Apple Corps. an interest in Apple Computer, shares or a seat on the board, could mean Apple will be able to secure exclusive online distribution of The Beatles catalogue.

Apple Corps, run on behalf of the directors by former Beatles road manager Neil Aspinall, was named as the firm with the fastest-growing profit in 2003 by the Sunday Times. It had seen a 194 per cent rise in profits since releasing a compilation album of 27 Beatles hits in 2000; Apple Corps profits have doubled each year, reaching £18.2 million in 2002.