Apple Corps' third bite into the Apple logo turned sour today, as a UK judge rejected the Beatles' company's trademark claims and ruled that the digital music giant is entitled to use the logo in its iTunes Music Store.

Apple Corps claimed that Apple had violated a 1991 agreement in which Apple paid Apple Corps $26.5 million and each side agreed not to enter into the other's field of business. But Judge Edward Mann ruled that he was not moved by Apple Corps' arguments, and that the apple logo was used in association with the iTunes store, not the music, and thus was not a breach of the agreement.

"I find no breach of the trademark agreement has been demonstrated," Mann said in his judgment, issued in London's High Court. "The action therefore fails."

The battle over the use of a logo--Apple Corps' is a green apple and Apple's is a cartoon apple with a bit out of it--had threatened Apple's iTunes marketing efforts.

This was the third time Apple Corps had sued over trademark infringement of the logo, with both prior cases ending with a settlement. It dates back to 1978, when George Harrison spotted an ad for Apple in a magazine and was concerned that fans would think the then-fledgling computer company was connected to the Apple Corps company the Fab Four created in 1968 to guard its commercial interests.

Apple lawyers argued that it was adhering to the 1991 agreement and that the logo was only used in conjunction with the iTunes store, not music itself. The 1991 agreement prohibited Apple from packaging, selling, or distributing any physical music materials, such as CDs. It did not, however, anticipate the dawn of digital music.

Apple argued that iTunes was a data transmission service that clearly did not stray into the activities of a record label. Apple attorney Anthony Grabiner said last month that "even a moron in a hurry could not be mistaken" about the difference between iTunes and a record label like Apple Corps.

Apple Corps said it would appeal the decision, but it remains to be seen if the verdict will propel the Beatles into the digital age, a move long-awaited by many fans. The Beatles and Apple Corps have yet to license any of the Fab Four's music to any digital music service, although there have been rumblings about such a step in recent weeks.

In a statement issued today, Apple chief Steve Jobs said he hoped to broker a deal to get the Beatles' catalof onto iTunes.

"We have always loved the Beatles, and hopefully we can now work together to get them on the iTunes Music Store," Jobs said.

Apple shares climbed nearly 1 percent to $72.59 in early trading, but dropped slightly to $71.45 in after-hours trading.