Apple's move against some iPod accessory dealers has claimed its first victim, Everything iPod.

The company, which has been distributing iPod peripherals since 2002, yesterday revealed that it will close down.

This follows recent Apple activity in which the company has been demanding that companies selling peripherals for its music playing products should cease using the 'iPod' trademark in their trading names and URLs.

Not just sellers, makers taxed too

Apple is also attempting to secure a 10 per cent slice of peripheral manufacturer's income if they want to carry the 'Made for iPod' logo. This strategy relates to products that connect to an Apple iPod port.

To help it do this, iPods carry a non-standard port. This means that in order to build products that connect with the Dock Connector, manufacturers must join Apple's scheme and pay 10 per cent of revenue to Apple.

A report on CNet confirms this, with Apple senior vice president Phil Schiller saying: "Yes, the electrical connection has specifications around that and licensing around that, and the way you get that assistance and information and licensing is through the 'Made for iPod' program."

Industry insiders say that Apple feels it should be profiting from the market it created.

Apple tightens control

Apple legal have been approaching such firms to demand they stop doing this. The company is also insisting retailers call the iPod an 'Apple iPod Device' when mentioning it on their sites.

In a further move to apply its control over the burgeoning iPod industry, Apple has demanded that Google reject AdWords containing some of its trademarks, including 'iPod'.

OFT complaint threat

This was all too much for Everything iPod. Company director Barry Mann plans to report Apple to the UK Office of Fair Trading as a reponse.

Speaking against Apple's actions, he said: "The trademark act clearly states that it is not considered an infringement of trademark where it is necessary to use the term to describe the goods sold. We have never passed ourselves off as Apple nor have we encountered a single instance of buyer confusion."

He continued: "It's a David and Goliath situation. We simply do not have the resources to defend ourselves against a big business bully like this."

The complexity of trademark law

However, some industry insiders reflect that Apple is right to protect its brand. Brand-owners must act to protect their brands under trademark law. If they fail to do so, they can see their brands taken from their control.

Apple's existing Mac resellers must comply with fairly strict guidelines in order to continue using certain trademarks.