The Validity of Apple’s App Store Trademark: Was Apple’s Marketing Too Good?
When I think of the App Store I think of Apple. But that comes from my bias as an addicted iPhone user. If I never gave up my Blackberry, would I still equate the App Store with Apple? Maybe. But again, that would likely be attributed to my bias as an addicted MacBook user. Apple Inc. has been using its App Store for a few years now. Recently, Amazon.com, Inc. began using the name Appstore for its software marketplace for Android. But the question remains whether term App Store is distinctive enough? If the term is not distinctive enough, and the term has become generic, then Apple’s trademark would not be valid.
On March 18, 2011, Apple filed a complaint with the United States District Court for the Northern District of California seeking to enjoin Amazon’s use of Apple’s App Store trademark. In its complaint, Apple argues that when the App Store launched it “represented a revolutionary kind of online software service and was an instant commercial and critical success” and that at that time the term App Store was not generally used in connection with the distribution of software programs. Apple argued that it spent millions of dollars on advertising to ingrain the term into the public mind. Further, Apple argued that it obtained registrations of the App Store mark in over fifty foreign jurisdictions, including the European Union, Japan, and China and that the success of the App Store service and the public attention it received “cemented the public’s identification of APP STORE as a trademark for Apple’s service.”
Meanwhile, Microsoft, Nokia, Sony Ericsson and HTC filed to invalidate Apple’s App Store trademark in the European Union. After Apple attempted to trademark the App Store term by registering it with the U.S. Patent and Trademark Office, Microsoft opposed the application. Microsoft argued that the term is now generic. Microsoft argued the following: “Any secondary meaning or fame Apple has in ‘App Store’ is de facto secondary meaning that cannot convert the generic term ‘app store’ into a protectable trademark. Apple cannot block competitors from using a generic name. ‘App store’ is generic and therefore in the public domain and free for all competitors to use.” This controversy surrounding the Apple registration of App Store with the U.S Patent and Trademark Office has been postponed until the Amazon–Apple case is resolved.
On January 2, 2013, the District Court for the Northern District of California granted Amazon partial summary judgment with regards to Apple’s false advertising claim, concluding that the consumer is not led to believe Amazon’s App Store is related to Apple. However, it remains to be determined who will ultimately prevail in this fight. Significantly, if the case goes to trial and Apple succeeds, the potential damages for software sales are enormous. In the event the case does go to trial and Apple seems to be making a strong case, a large settlement agreement is likely to surface. While the trial is scheduled for August 2013, U.S. Magistrate Judge Elizabeth Laporte ordered Apple and Amazon executives with the power to negotiate a binding agreement to attend a settlement discussion on March 21.
But what world would we like to live in? In one world, a company that comes up with a new, trendy phrase for a new concept is unable to trademark that genius. That company’s rights are pushed aside for its competitors. Would this landscape lead to a world with less innovation?
In the alternative world, a company that comes up with a new phrase can maintain the exclusive rights to use that phrase, even once that phrase is border-line generic. Should this company be able to preempt all of its competitors from using a phrase that consumers may expect to be used by all sellers in that industry? If the term is generic and used by the media and the pubic to refer to all software application stores should Apple still be able to claim exclusive rights to the term?
The answer is unclear. I would like to think that we could strike a nice balance between protecting the rights of the innovator and going overboard with that protection. Personally, with my Apple products in both hands, I tend to agree that the App Store is an exclusively-Apple term. But stepping out of my own Apple biases, it is a good question whether the term App Store is generally congruent with an Apple software store or simply to all software application stores.