Apple sues Amazon for trademark infringement

In a complaint filed in Federal District Court on March 18, 2011, Apple has sued Amazon for trademark infringement and unfair competition. Apple is requesting an order from the Court to prevent Amazon from using the “App Store” trademark in connection with the sale/advertising of software and for unspecified damages. At the same time, Microsoft is seeking to cancel Apple’s  federal trademark registration for App Store.

While this case represents a classic copyright infringment/TTAB cancellation case, what is interesting is that this case represents at least two of the largest trademark owners in the world, Apple and Microsoft.  Amazon is no slouch either.  Apple and Microsoft are traditional computer companies which in the past primarily targeted purchasers of personal computers while  Amazon is as an on-line retailer of books (and other stuff).  While this case may be considered a trademark infringement case in the classic sense, the litigation seems to indicate that this case is about technology, this case is about the battle to gain a foothold in the mobile market.  Does this suggest the trend is away from the computer or on-line retail sales?

In 2010, Apple obtained a federal registration for the trademark, APP STORE (although it was filed in 2008) in connection with mobile-software download services.  In its registration, Apple disclaimed the exclusive right to STORE.  Amazon began using the term App Store in connection with its website and recently began using the term in connection with advertising a popular software app (Angry Birds), which was also available on the Apple App Store. According to the complaint, the use by Amazon was likely to create confusion between the relevant purchasers and therefore, Apple was seeking relief from the Courts.

Under the Lanham Act, a cause of action related to trademark infringement may be brought based upon actual confusion or a likelihood of confusion.  In this case, Apple seems to be suggesting that because both Apple and Amazon are in the mobile software downloading business, and both are using the term App Store, there is likely to be confusion between purchasers of mobile applications.  Prior to filing the suit, Amazon has failed to sufficiently respond to three cease and desist letters sent by Apple’s counsel in an effort to resolve Apple’s concerns.  While Apple has a federally registered trademark, there are concerns about the descriptiveness of the term App Store.  In fact, prior to the filing of the suit by Apple, Microsoft had instituted a cancellation proceeding with the TTAB to cancel the federally registered App Store trademark.  The outcome of that case may impact Apple’s ability to stop Amazon from using the term App Store.

Under the Lanham Act, a trademark must meet three fundamental requirements:

It must consist of a word, name, symbol, device or any combination thereof, or any other kind of designation which the courts or the Patent and Trademark Office have found to qualify as a valid trademark

  1. It must be adopted and used by a manufacturer or merchant or qualify for intent to use treatment.
  2. It must identify the manufacturer’s or merchant’s goods and distinguish them from those manufactured or sold by others.

However, even being the first user of a term does not automatically qualify a term for trademark protection.  Some words, inherently lack the distinctiveness required for exclusive ownership by anyone.   These words generally fall into one of the categories of personal names, genericness, descriptive or are misleading in nature.  Some arguments related to the App Store trademark may indicate the term should not qualify for protection and therefore should be cancelled.  For example, the term may be Descriptive or Generic.

Descriptive Terms

These are words that simply describe the qualities, characteristics, functions or geographic origin of a good or service, such as Car Repair Shop. No trademark rights are granted to merely descriptive marks. However, it is possible for descriptive marks to become distinctive by achieving secondary meaning. Secondary meaning indicates that although the mark is on its face descriptive of the goods or services, consumers recognize the mark as having a source indicating function. Once it can be shown that a descriptive term or phrase has achieved a second meaning then a protectable trademark is developed. Secondary meaning can be achieved through long term use or large amounts of advertising and publicity.

Generic Words

Generic words are words that are associated with a good or service in general, without identification of any particular source of the product or service, such as aspirin. Generic words receive no trademark protection. Generic “marks” are devices which actually name a product and are incapable of functioning as a trademark. Unlike descriptive marks, generic devices will not become a trademark even if they are advertised so heavily that secondary meaning can be proven in the mind of consumers. The rationale for creating the category of generic marks is that no manufacturer or service provider should be given exclusive right to use words that generically identify a product. A valid trademark can become generic if the consuming public misuses the mark causing the mark to become the generic name for the product.

However, there is an important exception to the rule against trademark rights for descriptive terms.  In this case, Apple may try to argue that its use of the term App Store has “acquired distinctiveness.”  Simply stated, if a company can show that it has used a descriptive term so extensively that the public has come to associate that descriptive term with the company, the company can claim trademark rights in that term. Even if the mark has not been registered for five years leading to an incontestable mark.  By way of explanation, an incontestable mark, is generally one which has been registered on the principle register for more than five years.  In this case, Apple may be able to show that the trademark has acquired distinctiveness to qualify for protection based upon length of use, amount of money spent advertising it or notoriety within the relevant class of consumers.

As the case illustrates, the latest battle ground seems to be for a piece of the mobile market.  The litigation before the TTAB and the U.S. District Court between three of the worlds  biggest trademark owners should be full of twists and turns worthy of any Hollywood movie or best selling novel.



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