Amazon wins another battle in US 'App Store' litigation

25.02.2013
In March 2011, Apple Inc. brought proceedings in the US District Court against Amazon.com Inc. relating to the use by Amazon of the term 'Appstore' in connection with the sale of 'apps' for Android devices and the Kindle Fire.

Most users of Apple Inc. (Apple) devices, such as iPads and iPhones, are familiar with the Apple 'App Store'. Using the App Store, users can browse and download applications for free or at a cost to their device. The App Store was first launched in the US in July 2008. It also launched in Australia in 2008.Amazon.com Inc. (Amazon) launched its own mobile application store for Android devices, the Amazon Appstore for Android, in March 2011.

In March 2011, Apple Inc. (Apple) brought proceedings in the US District Court against Amazon.com Inc. (Amazon) relating to the use by Amazon of the term 'Appstore' in connection with the sale of 'apps' for Android devices and the Kindle Fire. Apple brought claims for trade mark infringement / dilution, false advertising and unfair competition.

In its complaint, Apple claims that prior to the introduction of its App Store service, operators of download services used a variety of terms with no similarity to App Store, and that the term App Store was not in general use in connection with the distribution of software programs prior to Apple's use of the term.

In its answer to Apple's complaint, Amazon claims that the term 'App Store' is generic and 'unprotectable'.

False advertising claim

A decision was handed down in the US District Court on 2 January 2013 dismissing Apple's false advertising claim.

Apple alleged that Amazon's use of the name 'Appstore' "represents the nature, characteristics and qualities of Amazon's mobile download service or has a tendency to deceive a substantial segment of consumers into believing that Amazon's service has the nature, characteristics and/or qualities of Apple's App Store service".

In her judgement District Judge Hamilton stated that "Apple essentially alleges that by using the word 'Appstore' in the name of Amazon's store, Amazon implies that its store is affiliated with or sponsored by Apple".

Apple also contended that Amazon's use of 'Appstore' would mislead consumers into thinking that Amazon's Appstore had characteristics or qualities that the public had come to expect of the name 'App Store', for example that Amazon's Appstore would have as many apps available as Apple's App Store.

The Court made an order granting Amazon's motion for partial summary judgment dismissing Apple's false advertising claim, commenting that Apple had presented no evidence of any Amazon website or advertisement attempting to mimic Apple's site or advertising, and that Apple had failed to establish that Amazon had made any false statement (express or implied) of fact that actually deceived or had a tendency to deceive a substantial segment of its audience. There was no evidence that a consumer who accessed the Amazon Appstore would expect that it would be identical to the Apple App Store, particularly given that the Apple App Store sells apps solely for Apple devices, while the Amazon Appstore sells apps solely for Android and Kindle devices.

The Court concluded that there was no evidence for the position that Amazon had expressly or impliedly communicated that its Appstore possessed the characteristics and qualities that the public expected from Apple's App Store, and the mere use of 'Appstore' by Amazon to designate a site for viewing and downloading/purchasing apps could not be construed as a representation that the nature, characteristics, or quality of the Amazon Appstore was the same as that of the Apple App Store.

The Court is yet to make any determination in relation to the trade mark and unfair competition claims.

Australian perspective

As at the date of this article, the Amazon Appstore is not available in Australia, much to the dismay of some android users in Australia.

If Amazon were to launch its Appstore in Australia, and Apple brought proceedings against Amazon, its likely potential causes of action would be for trade mark infringement, passing off, misleading or deceptive conduct under section 18 of the Australian Consumer Law (ACL) and false or misleading representations about services under section 29 of the ACL.

Passing off and misleading or deceptive conduct

In order to succeed in a passing off claim Apple would need to establish that by its use of the name 'Appstore' Amazon misrepresents that its service has a connection or affiliation with Apple's offering, resulting in damage or likely damage to Apple's goodwill. To succeed in actions under sections 18 or 29 of the ACL Apple would need to establish a false or misleading misrepresentation by Amazon to the relevant class of consumers either as to the characteristics of Amazon's Appstore services or to the effect that Amazon's Appstore service is a service of or is associated or affiliated with or sponsored or approved by Apple.

While the outcome would depend on the evidence advanced in the proceedings, Apple may have some difficulty in establishing that such misrepresentations have been conveyed, given that consumers might be expected to be aware of the distinct trade origins and functions of Amazon's and Apple's services.

Trade mark infringement

Unlike in the United States, Apple is the registered owner in Australia of the plain words trade mark 'APPSTORE' in class 35 (in relation to operating on-line marketplaces for buying, selling and exchanging computer software and on-demand applications) and class 42 (in relation to application service provider (ASP) featuring computer software in the field of business project management, business knowledge, information and asset management, customer relationship management, sales, marketing, e-commerce, electronic messaging, and web site development). The trade mark has a priority date of 13 December 2006. Apple also has a pending application for the trade mark 'APP STORE'. In the United States Apple has no registered trade marks for 'APP STORE' or 'APPSTORE'. Its application for the 'APP STORE' trade mark has been opposed by Microsoft Corporation on the basis that it is generic as used in connection with the classes of services claimed by Apple. That opposition has been suspended pending the outcome of Apple's action against Amazon in the US District Court.

As Apple has a trade mark registration in Australia, it is likely that it would be in a stronger position in Australia than the US in relation to any future claim for trade mark infringement if Amazon launched its Appstore in Australia.

Based on Amazon's usage of the term 'Appstore' in the US, it seems that it would commonly use the word in connection with the word 'Amazon' (perhaps in a distinctive font). On that basis Amazon could seek to argue that the mark it uses is 'Amazon Appstore' and is not substantially identical with or deceptively similar to Apple's 'APPSTORE' mark. There would however be a real possibility that the mark used by Amazon could be found to be deceptively similar to Apple's registered trade mark on the basis of the phrase 'APPSTORE' occurring prominently in Amazon's mark.

Amazon could seek to raise a defence that it is using the word 'Appstore' as a sign in good faith to indicate the kind, intended purpose, or some other characteristic of its services, on the basis that the term 'Appstore' is apt to describe a service of selling mobile applications via an online store. Amazon would probably also counter-claim seeking cancellation of Apple's registered trade mark, on the basis that:

  • it should not have been registered because the term 'APPSTORE' was at that time descriptive of the services it is registered for; or
  • the registered trade mark 'APPSTORE' has since the date of registration in 2006 become generally accepted as describing the service of selling mobile applications via an online store.

It will be interesting to see whether Amazon launches its Appstore in Australia, and if so whether it uses the name 'Appstore', given Apple's registered trade mark, or uses a another name. In Germany, France and Italy the equivalent Amazon mobile application store is called 'App-Shop'. The only other Amazon mobile application store using the term 'Appstore' is in the United Kingdom, where Apple has trade marks for the words 'APP STORE' and 'APPSTORE' registered (although a number of companies, including Amazon Media EU S.a.r.l., are currently requesting cancellation of Apple's Community trade mark for the word 'APP STORE' on the basis of invalidity).

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