The recent Apple v Amazon case in the United States (Apple Inc., v Amazon.com Inc., No. C 11-1327 PJH) concerning Amazon’s use of ‘APPSTORE’ provides an important lesson for business owners in relation to use of trade marks – that is, take care to select a trade mark which you alone can use.
As we have all seen in the media, Apple have been involved in some heavy litigation over the years, probably the most publicised is the litigation against Samsung regarding the design of smartphones and tablet computers – those global mobile device patent wars are still continuing.
Apple has recently taken on another corporate giant, the online retailer Amazon. com Inc. Apple complained when Amazon started to use ‘APPSTORE’ in connection with sales of applications for Android devices and the Kindle Fire (Amazon’s tablet computer). Apple argued that Amazon’s use of ‘APPSTORE’ amounted to infringement of Apple’s trade mark rights to the words ‘APP STORE’, dilution of that trade mark, and false advertising.
Apple has been using the words ‘APP STORE’ since July 2008 in connection with sales of apps for Apple mobile devices and had already applied to have the words registered as a trade mark. However, after its trade mark application was initially accepted by the US Trade Marks Office in January 2010, Microsoft made an application to oppose registration of the trade mark on the grounds that the term ‘APP STORE’ is a generic term and is not capable of identifying and distinguishing a single source. Microsoft stated that ‘App’ is short for ‘Application’, that ‘Applications’ are “computer programs that assist in the performance of specific tasks, such as word processing, accounting and many other functions” and that the word ‘App’ is a “common, generic name for software applications”.
Apple responded by arguing that the ‘APP STORE’ mark is clearly capable of identifying and distinguishing Apple as the source of the services it offered under the mark because of the “enormous reputation, goodwill and fame” that ‘APP STORE’ has developed and that the vastly predominant usage of ‘APP STORE’ is as a result of Apple’s “extraordinarily well-known APP STORE mark and the services rendered by Apple”.
In the Amazon case, Amazon sought a partial summary judgment (this type of judgment is appropriate when there is no genuine dispute as to any material fact and the party that makes the application is entitled to judgement as a matter of law) as to Apple’s claims of false advertising and was successful in that regard by judgement issued on 2 January 2013. The Californian Court found that Apple failed to establish that Amazon made any false statement of fact that actually deceived or had the tendency to deceive a substantial segment of its audience.
The trade mark infringement portion of the claim settled before it got to trial (which was scheduled for August 2013) and was dismissed on 8 July 2013.
In an official statement given by an Apple spokesperson about the decision to withdraw its claim against Amazon, Apple said, “We no longer see a need to pursue our case … With more than 900,000 apps and 50 billion downloads, customers know where they can purchase their favorite apps.”
This case demonstrates the importance of selecting an appropriate name very early on for your business, brand and products that is distinctive and unique to your business. Because, as this case shows, even if you are a massive international company with profits in the billions of dollars, the choice of a trade mark can leave the business in a very weak position when trying to throw its weight (i.e. money) around if it tries to rely on trade mark rights, which it does not have.
If the name is too generic to a point where others in the industry would naturally want to use that name to describe their own goods or services, it will become very difficult to register it as a trade mark. Also, if the name is too descriptive of the goods or services being offered, this will also create a hurdle to overcome in trying to obtain trade mark registration. For example, trade marks which have been held to be without inherent adaption to distinguish because they are ordinary descriptions of the goods or services include: ‘Mint Slice’ for biscuits; ‘Cranberry Classic’ for fruit juices; ‘Cheezy Twists’ for cheese flavoured twisted snack foods; and ’24 Hour Fitness’ for health club services.
So how do you pick the right trade mark?
We recommend undertaking thorough research into your chosen industry to ensure as far as possible that the name you choose is: (a) not already in use by another trader; (b) not used so frequently within your chosen industry so as to be vulnerable to a claim that it is generic; and (c) distinctive and unique enough so that it cannot be considered to be too descriptive resulting in you not getting monopoly rights over the name for your particular goods or services. Free online searches can be done through:
- The ATMOSS database on IP Australia’s website (www.ipaustralia.gov.au) for trade marks already applied for and registered.
- The Australian Securities and Investment Commission (ASIC) website (www.asic.gov.au) for business and company names.
- The Government’s Australian Business Number website (www. abr.business.gov.au) for listings of registered ABNs.
- Just general searching through Google – both normal word searching and images searching.
So before you expend a considerable amount of money establishing your business (printing stationery, contracting with graphic artists to design your logo, erecting signage etc.) do your research and talk to your lawyer or trade mark attorney about the various different business names, brand names, product names that you are thinking about using so as to put yourself in the best position to protect your hard work and valuable reputation against those wishing to ride off of your coattails.