Oh, really? When did Apple exhibit films before 2013?
Apple was exhibiting films before 2013, via AppleTV, and Apple Corp was in the film business way before then.
Apple owns trademarks in that business from their own streaming as well as Apple Corps previous work..
It's not a leap to think "Apple Cinema" is an Apple product, and not a sepearate company given how well know Apple is and their efforts in that business. IANAL, but based on what I know a
'reasonably prudent consumer' would determine their is a strong likelyhood of confusion at a trial.
Since trademark law relies on the likely hood of confusing, it's reasonable to determine Apple Cinema's use of Apple Cinema is likely to cause confusion; which is why the USPTO denied the trademarks to them.
So why won't Apple do that with this tiny little upstart? If Apple records could do it, why won't Apple, Inc do it?
Apple had the money to buy the rights, and since Apple Corp got what they wanted via a license, a deal was worked out. Neither wanted an expensive court fight that may have resulted in a bad outcome for either or both.
I doubt Apple Cinema has the money to fight Apple, and since they would likely lose, IMHO, to continue would be a very bad business decision.
What I don't get was when Apple sent a cease and desist letter they went forward anyway; maybe they thought the publicity would be valuable to get a more national footprint and then would change their name? That Apple wouldn't fight them?
At any rate, using an Apple in their logo and the names Apple and Apple Cinema, when Apple has trademarks for one and one very close to Apple Cinema, both of which have been in use long before they came on to the scene, was probably not a winning idea.
Apple has paid for trademarks held by others, as witnessed by the Macintosh vs McIntosh Laboratory, a well known high-end audio equipment manufacturer. Jobs may have been trying to be cute by using Macintosh instead of McIntosh, but again, IMHO, McIntosh Laboratory had a much better argument for their trademark than Apple Cinema does. Apple wisely decided to make a deal and paid to secure the rights to the trademark Apple's application to trademark "Macintosh" was denied because of its phonetic similarity to McIntosh Laboratory's existing brand.
Has apple gone overboard in some cases by sending cease and desist orders or threatening alwsuits, certainly, I would argue yes; but not in this case.
Edit: added cite