Sour apples for Napster-like start-up

Bill Bales would rather switch than fight.

The Napster co-founder's second file-swapping start-up, AppleSoup, today said it will change its name to "Flycode" following a complaint from Apple Computer.

The company received a cease-and-desist letter from Apple six weeks ago, saying the name infringed its trademarks and demanding AppleSoup discontinue the name and eventually hand the "applesoup.com" domain name to the computer giant.

Bales launched Flycode in July with the goal of building a Hollywood-friendly video version of Napster's wildly popular music-swapping software.

A Flycode representative said that despite today's name change, the company plans to keep the URL and redirect people to its new site. As of today, AppleSoup.com remains live on the Web. The Flycode.com site links to similar pages.

Apple was not immediately available for comment.

Corporate name changes usually set back companies because they need to expend resources in re-branding their message. But for Flycode, a company that has yet to launch a product, the effects of the name change could be less damaging. The company itself interprets the move as a forced action for a greater benefit in the long term.

"They are doing us a favor by having us change names," said Cate Riegner,

AppleSoup

vice president of marketing at Flycode. "The fact that Apple has such a strong brand, we don't want to risk being confused with them."

Flycode is another of the "peer-to-peer" technologies that have recently burst onto the scene. Piggybacking on the immense popularity of Napster among music fans, companies and technologies such as Gnutella, Scour and Lightshare have begun tapping the growing popularity of file-swapping software.

But despite considerable attention from the media and the legal repercussions from the entertainment industry, many of these technologies remain on shaky ground. Just last week, Scour said it would lay off two-thirds of its staff after unsuccessfully trying to raise financing while fighting a copyright infringement lawsuit brought by the movie and record industries.

Napster's future remains in question as well, as the record industry fights to shut it down. On Friday, the U.S. government joined the side of the Recording Industry Association of America. Government agencies filed a "friend of the court" brief, urging a federal appeals court to uphold a judge's order that would effectively shut down the service pending a trial on charges of copyright infringement.

Separate legal efforts from musicians have also gathered steam. Just last week, the attorney representing Dr. Dre and Metallica began sending letters to colleges and universities asking them to block access to Napster. Already, several universities have stopped allowing students to use the service on school networks.