Use of term "appstore" is not deceiving, rules US court

Today the US District Court for the Northern District of California rejected Apple's claim that Amazon's use of the term "appstore" in connection with sales of applications ("apps") for Android devices and the Kindle Fire (Amazon's tablet computer) was false advertising (press coverage here, here, here ...). 

Since 2008, Apple has sold apps for its mobile devices through its App Store. In the same year, Apple applied to register the App Store mark with the USPTO, but Microsoft opposed the registration, asserting that such mark could not be registered because of its generic character. At the end of 2011, the Trademark Trials and Appeals Board suspended the opposition proceeding pending the outcome of the action brought by Apple against Amazon earlier that year asserting, among other things, trademark infringement, false designation of origin, false description, and false advertising under §43(a) of the Lanham Act; and dilution, under §43(c) of the same act.

The order rendered today concerns Amazon's application for partial summary judgment for false advertising only, in particular whether Amazon made a false statement of fact in a commercial advertisement about its own or another's product. What Apple claimed was that, by using the word "appstore", Amazon implied that its store was affiliated with or sponsored by Apple. 

As recalled by the court, a false advertising claim under §43(a) has five elements:

(1) a false statement of fact by the defendant in a commercial advertisement about its own or another’s product;

(2) the statement actually deceived or has the tendency to deceive a substantial segment of its audience;

(3) the deception is material, in that it is likely to influence the purchasing decision;

(4) the defendant caused the false statement to enter interstate commerce; and 

(5) the plaintiff has been or is likely to be injured as a result of the false statement, either by direct diversion of sales from itself to defendant or by a lessening of the goodwill associated with its products.

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According to Judge Hamilton, 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 mere use of the term "appstore" by Amazon to designate a site for viewing and downloading/purchasing apps could not be construed as a representation that the nature, characteristics of quality of the Amazon appstore were the same as that of the Apple App Store. In particular, Apple failed to present any evidence that consumers or costumers understood "app store" to include specific qualities or characteristics or attributes of the Apple App Store, or that any costumers were misled by Amazon's use of the term.   

As explained by TechCrunch, a decision regarding trademark infringement is yet to be taken. On this front, Amazon has cited other incidences where former Apple CEO Steve Jobs and current CEO Tim Cook referred to competitors’ stores, calling them “app stores” during press events and investor calls.

On the one hand, Merpel is rather sceptical about Apple's chances of success in the trademark piece of litigation. On the other hand, she is even more sceptical as to whether a similar claim of false advertising would have been decided the same way on the other side of the Atlantic, in that Directive 2005/29 would have been perhaps more favourable to Apple’s claim.