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Velvet Underground, Warhol settle after banana split

By Nate Raymond

NEW YORK (Reuters) - Velvet Underground, the 1960s avant-garde rock band, has settled a fight with the Andy Warhol Foundation for the Visual Arts over the rights to an iconic pop art image of a banana that graced the band's best-known album.

Velvet Underground sued the Warhol Foundation in January 2012 after reports that the foundation was planning to license the banana design for cases, sleeves and bags for Apple Inc's iPhone and iPad.

The settlement, disclosed in a filing in federal court in New York on Wednesday, averts a trial that was set to begin July 29. The court filing did not give the terms of the settlement.

Velvet Underground, founded by John Cale and Lou Reed, collaborated with Warhol beginning in the 1960s. Warhol designed the banana image and the band featured it on its first album, "The Velvet Underground & Nico," in 1967.

While the band broke up in 1972, the album lived on and is ranked by Rolling Stone magazine as 13th on its list of greatest albums of all time.

In the lawsuit, the Velvet Underground claimed exclusive use of the banana design for licensed merchandising. The lawsuit sought damages and an injunction to prevent the foundation from licensing the image.

The foundation, which was set up under Warhol's will to advance the visual arts, took ownership of his copyrights in 1987. It has in the past licensed material to companies including Levi Strauss & Co and Campbell's Soup Co, according to the foundation's website.

In the lawsuit, it countered that the Velvet Underground had no enforceable trademark rights to the image.

The Velvet Underground also asked the court to rule that the Warhol Foundation had no copyright to the banana image. But in September the judge, Alison Nathan, found that an agreement by the Warhol Foundation not to sue Velvet Underground for copyright infringement nixed any copyright questions.

Joshua Paul, a lawyer for the foundation at the law firm Collen IP, declined to comment on the settlement. Clifford James, a lawyer for Velvet Underground, did not immediately respond to a request for comment.

(Editing by Philip Barbara)

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