Justice Yates of the Federal Court has declared that the words APP STORE are not to any extent capable of distinguishing Apple Inc.'s retail, telecommunications and computer-related services from those of other traders. This decision demonstrates the difficulty of registering a mark with descriptive connotations.

Background

In 2008, Apple filed an application to register the trade mark APP STORE in Classes 35, 38 and 42, which claimed a Convention priority date from a corresponding application made in Trinidad and Tobago on 7 March 2008. After the application was accepted for registration, IP Australia raised a late objection to the APP STORE trade mark in Class 35 on the basis that the trade mark was to some extent lacking distinctiveness and fell within the scope of section 41(5) of the unamended Trade Marks Act 1995  (Act)*. Apple requested a hearing before a delegate of the Registrar, who found that the APP STORE trade mark wholly lacked distinctiveness and that Apple had not used the words APP STORE in a trade mark context to a sufficient extent that the words had acquired distinctiveness. Apple appealed the Registrar's decision.

Criteria for assessing inherent distinctiveness

Justice Yates indicated that the registrability of the APP STORE word mark was to be assessed in light of:

  1. The nature of the mark itself (word mark v composite or stylised mark);
  2. The description of goods and/or services covered by the application (that is, notional use, not actual use); and
  3. The presumption of registrability as it applies to sections 41(5) and 41(6) of the Act – that is, the presumption does not apply and the applicant is required to 'satisfy' the Registrar (s41(5)) or 'establish' (s41(6)) that the relevant registrability criteria have been met.

The Registrar relied on dictionary definitions for the words 'app' and 'store' as basis for finding that the APP STORE mark had no inherent ability to distinguish the services covered by the application.

Date for assessing distinctiveness

The APP STORE application was filed in July 2008 but claimed priority under the Paris Convention from a Trinidad & Tobago application that was filed in March 2008. The Registrar considered that the date for assessing factual distinctiveness of the APP STORE mark under s41(6) was the March 2008 priority date. Apple, however, contended that the date for assessing factual distinctiveness was the actual filing date of the application in July 2008. As s41(6) specifically requires use of applied for mark before 'the filing date' (rather than the 'priority date' as used in sections 44 and 60), Justice Yates held that the relevant date for assessing factual distinctiveness was the filing date of the APP STORE application in July 2008.

Apple's case

Apple commenced worldwide use of the APP STORE trade mark one week before filing its trade mark application in Australia. Accordingly, there was little evidence available to support registration under s41(6). Apple's arguments before the Registrar of Trade Marks in support of the registrability of the APP STORE mark included:

  • Lack of use of the expression 'app store' by other traders;
  • Ownership of a prior registration for the word APPSTORE (Reg no 1156967); and
  • Apple had used the trade mark sufficiently to satisfy the requirements of s41(5).

On appeal before Justice Yates, Apple adduced evidence from a number of witnesses, including Apple employees, a professor of linguistics (Harris), survey evidence from the director of a market and social research company (Newspoll survey) and the director of an IT consultancy firm (Farrow). Harris offered testimony that, in his expert opinion, consumers would not fully understand the meaning of the words 'app store' by simply combining the definitions of each word. The word STORE in the trade mark had a unique and noteworthy aspect, given that Apple's services were provided online and without any physical location. Furthermore, there was a 'strong linguistic connection' between the word APP and the name of the applicant, Apple, which would trigger an association in the minds of consumers between the APP STORE trade mark and Apple. The Newspoll survey was submitted as evidence that a significant percentage of the consumers surveyed (1224 people) were aware of the term 'App Store' (79 per cent). Sixty-four per cent of these respondents indicated that they associated the term 'App Store' with a particular company and 88 per cent of that subset of respondents associated the term 'App Store' with Apple or one of its sub-brands (iPhone, iTunes or iPod). Farrow's evidence consisted of search results from various internet search engines, as well as a review of Google Trends analytics data and information available on The Internet Archive. It was adduced in support of Apple's assertion that the term 'app store' was not desired for use by other traders prior to Apple's adoption of the term. Apple's submissions, based on this evidence, consisted of the following arguments:

  • The words APP STORE were inherently registrable without recourse to s41(5) or (6) as it was not a common English expression at the filing date of the application and use of the word STORE involved an element of creativity because the services covered by the application were not physically available;
  • Alternatively, the APP STORE mark should be registered under s41(5) or (6) on the basis of its acquired distinctiveness because the APP STORE mark immediately functioned as a badge of origin;
  • The Examiner at IP Australia did not raise a distinctiveness objection against the application for APP STORE; and
  • The previous registration for APPSTORE (which Apple acquired) had been accepted for registration without facing a distinctiveness objection.

The Registrar's case

In answer to Apple's position, the Registrar of Trade Marks adduced evidence from its own linguistic expert (James), together with evidence from a Crown solicitor regarding use of the words 'app store' on the internet. In addition to this evidence, Microsoft Corporation (not a party to the proceedings) instructed its Australian solicitors to provide the Registrar with additional affidavits relating to use of the words 'app store' on the internet. James' evidence contradicted the Harris evidence in that it demonstrated that the word 'app' was commonly used by consumers in 2008 to refer to software applications. Furthermore, the word 'store' was used 'with a great deal of flexibility' therefore consumers would easily understand the words APP STORE to be directly descriptive of Apple's services. James also conducted his own internet searches that revealed a higher number of internet hits between 2005 and 2009 than those indicated by Harris and dismissed Harris' contention that the words APP STORE would create a strong linguistic connection between Apple and the words APP STORE. The Registrar's position, based on this evidence, was that:

  • The words APP STORE wholly lack distinctiveness as they were directly descriptive of at least the Class 35 services covered by the subject application; and
  • Apple had not demonstrated that the words APP STORE had acquired distinctiveness, whether assessed under s41(5) or (6).

Justice Yates' findings

Justice Yates dismissed the Harris evidence as being 'in large measure, argumentative, rather than factual' and stated that Apple's adoption of the term 'app store' was not 'some new or otherwise special use of either term'. Apple's own press releases were held to demonstrate that Apple was not using the words APP STORE in some new or coined manner and Justice Yates was dismissive of Apple's argument that the word STORE was being used in any novel manner, particularly given that the structure of Apple's Class 35 services could include retail services provided through a physical location or store. Justice Yates held that the words APP STORE were not to any extent inherently adapted to distinguish the Class 35 services covered by the application, saying:

…even if it be assumed that Apple was the first to use the expression "app store", it would not follow from that fact that APP STORE was, or was to some extent, at the filing date, inherently adapted to distinguish the designated services in Class 35.

Furthermore, because of the limited use by Apple at the filing date of the APP STORE application, His Honour found that the APP STORE mark had not acquired sufficient distinctiveness to warrant registration. The survey evidence adduced by Apple was criticised as having limited probative value because:

  • The survey was conducted three years after the filing date of the application so could not demonstrate that 'at the filing date' the words APP STORE acted as a badge of origin; and
  • The survey demonstrated that a significant number of consumers 'associated' the words APP STORE with Apple but failed to demonstrate that consumers attributed trade mark signification to the words APP STORE.

In relation to the services in Classes 38 and 42 of the application, Justice Yates stated that:

My finding that the application for registration of APP STORE for the designated services in Class 35 must be rejected determines the fate of the application as a whole.  This is because there are no separate applications for registration of the mark for the designated services in Classes 38 and 42…If the application fails in one respect, it fails as a whole.

On that basis, His Honour was satisfied that the APP STORE mark was not inherently adapted to distinguish any of the services covered by the application. The application, as a whole, was rejected.

Take-home message

An invented word or sign is always the best type of trade mark – or a mark with, at most, only a skilful allusion to some quality of the relevant goods or services. Apple has undeniably broad consumer reach and significant resources to devote to educating consumers that certain words and signs are trade marks.  However, even these resources were insufficient in this instance (albeit over a very short period of time between launch and filing) to bestow any (acquired) distinctiveness on the APP STORE mark. We're not necessarily saying that this is a case of SOAP for soap** but…