by David Muradyan

Is Apple, Inc.’s (“Apple”) APP STORE mark worthy of trademark protection or is the mark merely a generic term which deserves no protection? This is among the questions that the U.S. District Court for the Northern District of California (the “Court”) will decide in Apple Inc. v., Inc., Case No. 11-1327. In this action, Apple sued, Inc. (“Amazon”), alleging trademark infringement, false designation of origin and false description, under the Lanham Trademark Act of 1946, 15 U.S.C. § 1125(a) (“Lanham Act”), among other claims.

Allegations contained in Apple’s Complaint with respect to the APP STORE service and trademark infringement by Amazon

According to Apple’s complaint (the “Complaint”), in July 2008, Apple launched its APP STORE service, which “allows users of Apple’s iPhone, iPod and, most recently, iPad mobile devices, and users of computers running Apple’s iTunes software, to browse for and license a wide range of third party software programs, including games, business, educational, finance, news, sports, productivity, social networking, health, reference, travel, and utility software.” That same month, Apple applied with the U.S. Patent and Trademark Office (“USPTO”) to register the APP STORE mark in the United States, and the USPTO eventually approved Apple’s application to register the APP STORE as a trademark. However, Microsoft has opposed the application’s registration, arguing that the term APP STORE is “too generic,” and the matter is currently pending in proceedings before the Trademark Trial and Appeal Board.  

The Complaint alleges that prior to Apple’s APP STORE service, other companies in the industry offered a variety of downloadable mobile software such as ringtones, wallpapers, and games, but that such companies branded their services with a variety of terms that “bore no similarity to APP STORE.” The Complaint sets forth Apple’s coining of the APP STORE term as a trademark and Apple’s use in commerce of the mark through its extensive advertising, marketing and promotion of the APP STORE service and the APP STORE mark. The Complaint also sets forth facts demonstrating steps Apple has taken to ensure protection of the APP STORE mark, along with facts outlining the dispute with Amazon over the APP STORE mark. According to Apple, upon its launch, the APP STORE service represented a “revolutionary kind of online software service” and that Apple coined the term APP STORE as a means of branding its new service. The Complaint alleges that prior to Apple’s adoption of the term as a trademark, the term APP STORE was not in general use in connection with the distribution of software programs. The Complaint also asserts that the popularity of Apple’s mobile software download service has prompted other major competitors to offer their own software download services that compete with Apple’s mobile operating system. More relevant, however, the Complaint alleges that many of Apple’s major competitors have branded and described their own mobile software download services without using the APP STORE mark. The Complaint also alleges that although in limited instances, third parties have made improper use of the term APP STORE, in almost every instance where Apple has contacted those parties and requested that they cease and desist from further use of the mark, the entities have agreed to cease use of Apple’s APP STORE mark.

In a nutshell, the APP STORE service serves as the distribution center for a variety of software programs developed by third parties or by Apple. Software developers that wish to distribute software programs through the APP STORE service must sign a distribution agreement appointing Apple as their worldwide agent for delivery of the software programs. Once the various software programs are in Apple’s “distribution center,” customers—as licensees rather than purchasers—may download such programs. For example, if a user of an Apple mobile device like the iPhone desires to play the popular “Angry Birds” video game, they could obtain a copy of the program on their device by licensing the software through the APP STORE service.

According to the Complaint, in January 2011, Amazon began soliciting software developers to participate in a future mobile software download service offered by Amazon. Apple alleges that it has contacted Amazon numerous times and demanded that Amazon cease its use of the APP STORE mark, to no avail. The Complaint alleges that Amazon used and has been using the APP STORE mark in connection with what Amazon terms the “Amazon Appstore Developer Portal” and the “Amazon Appstore Developer Program.” Moreover, Apple claims that Amazon has expanded its infringing use of the APP STORE mark by using the mark in connection with advertisements for a forthcoming software product called “Angry Birds Rio” to be offered “exclusively on the Amazon Appstore” and Amazon’s website indicates that “Angry Birds Rio Is Coming Soon.”

Apple alleges that it has used its APP STORE trademark since 2008 to identify its services, and that the general consuming public widely recognizes the APP STORE mark as designating Apple as the source of services and/or goods. The Complaint further states that consumers of mobile software downloads are likely to be confused as to whether Amazon’s mobile software download service is sponsored or approved by Apple or is merely a conduit for Apple’s APP STORE service. According to Apple, Amazon’s use of Apple’s APP STORE mark constitutes a false designation of origin and/or false or misleading description or representation of fact that is likely to cause confusion, to cause mistake, or to deceive as to (a) the affiliation, connection, or association of Amazon with Apple and/or (b) the origin, sponsorship, or approval of Amazon’s goods, services, or commercial activities by Apple. Apple alleges that Amazon’s wrongful activities have caused Apple irreparable injury and that unless Amazon’s conduct is enjoined by the Court, Amazon will continue and expand those activities to the continued and irreparable injury of Apple.

Trademark Infringement – Background

The Lanham Act provides that “[a]ny person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which . . .  is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person . . . shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.” See 15 U.S.C. § 1125(a); see also 15 U.S.C. § 1114(1) (permitting a federal trademark infringement claim to be brought by the holder of a registered trademark against any person who shall, without the registered trademark holder’s consent, (1) use any reproduction, counterfeit, copy, or colorable imitation of a registered mark; (2) in commerce; (3) in connection with the sale, offering for sale, distribution, or advertising of any goods or services; (4) where such use is likely to cause confusion, or to cause mistake, or to deceive).  

The Lanham Act defines a trademark as including "any word, name, symbol, or device or any combination thereof" used by any person “to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown." 15 U.S.C. § 1127. Before claiming trademark infringement, a plaintiff must have a “valid, protectable trademark," and for a trademark to be “valid and protectable,” it must be “distinctive.” Zobmondo Entertainment, LLC v. Falls Media, LLC, 602 F.3d 1108, 1113 (9th Cir. 2010). A trademark’s distinctiveness measures its primary significance to the purchasing public. Quicksilver, Inc. v. Kymsta Corp., 466 F.3d 749, 760 (9th Cir.2006) (quotation marks omitted).

Marks are generally classified in categories of increasing distinctiveness, including (1) generic; (2) descriptive; (3) suggestive; (4) arbitrary; or (5) fanciful. Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768 (1992). As a general matter, "[t]he more likely a mark is to be remembered and associated in the public mind with the mark’s owner, the greater protection the mark is accorded by trademark laws.", Inc. v. Walt Disney Co., 202 F.3d 1199, 1207 (9th Cir. 2000). As the Ninth Circuit has explained: “A mark’s conceptual strength depends largely on the obviousness of its connection to the good or service to which it refers. The less obvious the connection, the stronger the mark, and vice versa. . . . At one end of the spectrum, generic marks refer to the genus of which the particular product is a species, such as ‘bread’ or ‘door,’ and are not registerable as trademarks. At the other end of the spectrum are arbitrary marks—actual words with no connection to the product—such as Apple computers and Camel cigarettes, and fanciful marks—made-up words with no discernable meaning—such as Kodak film and Sony electronics that are inherently distinctive and therefore receive maximum trademark protection. In the middle are descriptive marks, which describe the qualities or characteristics of a good or service and only receive protection if they acquire secondary meaning, and suggestive marks, which require a consumer to use imagination or any type of multistage reasoning to understand the mark’s significance and automatically receive protection.” Fortune Dynamic, Inc. v. Victoria’s Secret Stores Brand Management, Inc., 618 F.3d 1025, 1032-33 (9th Cir. 2010) (citations, quotation marks and formatting omitted).

“The likelihood of confusion is the central element of trademark infringement, and the issue can be recast as the determination of whether the similarity of the marks is likely to confuse customers about the source of the products.”, Inc., 202 F.3d at 1205 (citations and quotation marks omitted). In evaluating the likelihood of confusion between related goods or services, the following factors (referred to as the Sleekcraft factors) are considered: (1) strength of the mark, (2) proximity or the goods or services, (3) similarity of the marks, (4) evidence of actual confusion, (5) the marketing channels used, (6) the type of goods or services and the degree of care likely to be exercised by the purchasers of the defendant’s product, (7) defendant’s intent in selecting the mark, and (8) the likelihood of expansion of the product lines. AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341, 348-49 (9th Cir. 1979). The Ninth Circuit has stated that in the context of the Web, “the three most important Sleekcraft factors are (1) the similarity of the marks, (2) the relatedness of the goods or services, and (3) the simultaneous use of the Web as a marketing channel.” Id.

Analysis of Apple’s trademark infringement claim against Amazon

Whether Apple prevails in its suit against Amazon, at least with respect to its the trademark infringement claim, will depend largely on whether the Court finds that the various Amazon terms—“Amazon Appstore Developer Portal,” “Amazon Appstore Developer Program,” and “Amazon Appstore”—are so similar to Apple’s APP STORE mark that they’re likely to confuse consumers about the source of those services. Given that both Apple’s APP STORE mark and the terms that Amazon uses with respect to its applications are similar marks dealing with similar services, the Court will likely focus on the “strength” of Apple’s APP STORE mark, among the other Sleekcraft factors, to determine whether the consuming public would be confused as to the source of the services. Amazon may defend itself by arguing that the APP STORE mark is generic and not worthy of trademark protection since “APP” does not necessarily mean Apple but can be a short hand for “Application.”  Apple may counter that the APP STORE mark is a descriptive, rather than a generic mark, and that the mark describes the qualities of characteristics of the service and is entitled to protection since it has acquired secondary meaning with the consuming public due to the rather extensive advertising campaign that Apple has conducted to promote the APP STORE mark. If Apple can demonstrate through evidence that customers are “actually confused” about the source of the services, that will increase the likelihood of prevailing in its trademark infringement suit. The Court will likely also assess the other Sleekcraft factors—including the marketing channels used and Amazon’s intent in selecting the mark—to determine likelihood of confusion. It is likely that Apple will also emphasize that Amazon’s use of Apple’s APP STORE mark constitutes a false designation of origin and/or false or misleading description or representation of fact that is likely to cause confusion, to cause mistake, or to deceive as to (a) the affiliation, connection, or association of Amazon with Apple and/or (b) the origin, sponsorship, or approval of Amazon’s goods, services, or commercial activities by Apple.

It’s possible that the opposition by Microsoft with respect to Apple’s registration of the APP STORE mark currently pending in proceedings before the Trademark Trial and Appeal Board may have an impact one way or another. Ultimately, as the plaintiff, Apple will have the burden of proving that Amazon’s use of the marks set forth above constitute trademark infringement.