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Gripes force Apple to change iTools contract

Apple averts a potential customer relations problem this week with the change of a few words in the terms of use for its new Internet services.

Apple averted a potential customer relations problem this week with the change of a few words in the terms of use for its new Internet services.

A controversy began brewing earlier this week in the Macintosh user community over the legal agreements for Apple's iTools services. Some feared the agreement would essentially sign away intellectual property rights to Apple.

Apple's iTools--new Web-based services on Apple's site, unveiled in January--include an area for creating and storing Web pages and a Net-based data storage service that acts like a virtual giant hard disk.

Under the old terms of service, it was feared, Apple could have turned a user's posted material--a photograph, for instance--and use it in commercials or other forms of entertainment to which they would have no rights. But Apple offered up new terms of service late yesterday that seem to have quelled concerns for now.

"I was surprised at Apple's quick resolution. It initially appeared that it might take a while for Apple to come around," said Jim Burton, a Webmaster in Montana. Burton had posted a note on his own site calling for others to join in the protest; the site now offers a note of thanks to Apple.

"Obviously, someone at Apple was listening," Burton said in an email. "The new terms of service (are) actually quite reasonable," he said.

The tempest echoed one which hit Yahoo last year after its acquisition of GeoCities. Users started a boycott after discovering that the new terms allowing them to use the GeoCities free home page service could potentially mean Yahoo could take their ideas and make money from them. Yahoo quickly revised its terms.

What stirred the ire of Mac users were these words: "You hereby grant Apple a worldwide, perpetual, irrevocable, royalty-free, sublicensable (through multiple tiers) right to exercise all rights, under copyright, publicity and related laws, in any media now known or not currently known, with respect to any content you post in any public site within iTools."

Rhona Hamilton, a spokeswoman for the company, said: "It was never Apple's intent to use content posted by members of iTools in any commercial manner, and we have clarified our terms of service."

The iTools services are part of Apple's Internet strategy, an essential component to helping grow the company's profits. Any qualms about using the services could put a damper on those plans.

Apple said last month that in its first week of availability, there were more than 10 million page views of its revamped corporate site. Among the new Internet services it is offering, over 250,000 greeting cards have been sent and over 150,000 customers are using its Internet-based iDisk storage service, the company said.