updated 4/5/2006 9:40:23 AM ET 2006-04-05T13:40:23

A lawyer for Apple Computer Inc. on Wednesday defended the company’s right to use its apple logo in a series of TV advertisements for its iTunes Music Store, despite objections from the Beatles’ Apple Corps Ltd. recording label.

Apple Corps is suing Apple Computer in London’s High Court, claiming the computer company has broken a 1991 agreement in which each agreed not to enter into the others’ field of business.

The British company, started by the Beatles in 1968, argues that Apple Computer has infringed its territory by entering into the music business and is seeking to force Apple Computer to drop its apple logo from the iTunes Music Store and pay unspecified damages.

However, Anthony Grabiner, a lawyer for Apple Computer, said Wednesday advertisements featuring musical acts U2, Eminem and Cold Play were entitled to display the apple logo because they were promoting the iTunes store and not the music itself.

“Viewers aren’t ignorant people, but ... have significant understanding of what Apple Computer does and the object of the exercise, accepted by people watching, was to get the benefit of the download,” Grabiner said during his closing arguments in the case.

“Apple Computer has the exclusive right to use the apple mark on such a broadcast, if used to indicate the source or origin of the hardware and downloading services mentioned in the advert,” he said.

At the core of the Apple vs. Apple dispute are conflicting interpretations of the 1991 agreement that ended more than a decade of legal wrangling between the two companies.

Grabiner has rejected Apple Corps’ claim that the tech company’s iTunes Music Store violated the trademark agreement.

He has said the Cupertino, Calif.-based computer company paid the Fab Four’s firm $26.5 million as part of the 1991 out-of-court settlement, and in return had received “a considerably expanded field of use.” The terms of the deal were kept confidential at the time.

Grabiner has said the “distribution of digital entertainment content” was permitted at Apple Computer under the agreement.

But Apple Corps’ lawyer Geoffrey Vos argued that Apple Computer’s music distribution business “was flatly contradictory to the provisions of the agreement.”

Apple Corps, whose logo is a green Granny Smith apple, is still owned by Paul McCartney, Ringo Starr, the widow of John Lennon and the estate of George Harrison.

Vos has argued that while Apple Computer is entitled to produce programs like iTunes, it should stay out of the music business if it uses its own apple logo, a cartoonish apple with a neat bite out of its side.

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