Apple Inc v Amazon.com Inc, US District Court for the Northern District of California, No C 11-1327 PJH (N D Cal, 2 January 2013)
Journal of Intellectual Property Law & Practice (2013) doi: 10.1093/jiplp/jpt075, first published online: May 24, 2013
Abstract
With its order on 2 January 2013, a US District Court rejected Apple's claim that Amazon's use of term ‘appstore’ in relation to its sale of applications (‘apps’) for Android devices and the Kindle Fire (Amazon's tablet computer) was false advertising.
Legal context
Following Amazon's initiative to set up its own mobile software download service called ‘Amazon Appstore’, in 2011 Apple filed a lawsuit claiming, among other things, that Amazon's use of the term ‘appstore’ amounted to trade mark infringement, false designation of origin, false description and false advertising under s 43(a) of the Lanham Act, as well as dilution under s 43(c) of the same Act. The order rendered at the beginning of 2013 concerned Amazon's request for partial summary judgment in relation to the cause of action for false advertising.
Facts
Apple had since 2008 used its App Store to market apps for its mobile devices. In the same year, Apple applied to register the App Store mark with the US Patent and Trademark Office (USPTO). Microsoft opposed the registration, asserting that this mark could not be registered because of its generic character. At the end of 2011, the USPTO's Trademark Trial and Appeal Board suspended the opposition proceedings pending the outcome of the lawsuit initiated by Apple against Amazon earlier that year, following three unsuccessful requests that Amazon cease to use the App Store mark in relation to its mobile software download service.
At the end of October 2012, Amazon filed a motion for partial summary judgment, asking the court to decide whether it had made a false statement of fact in a commercial advertisement about its own or another's product. Apple had argued that, by using the word ‘appstore’, Amazon implied that its store was affiliated with or sponsored by Apple. By doing so, not only would have the goodwill associated with Apple been lessened, but also a substantial segment of consumers were or could have been deceived into believing that Amazon Appstore was similar to Apple App Store. As a result of this deception, consumers could have altered their own purchasing decisions, with revenues being unduly diverted from Apple to Amazon.
Analysis
As mentioned by the court, an action for false advertising under s 43(a) of the Lanham Act 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.
What was disputed in this case was solely the first element of the action, that is, whether Amazon had made a false statement of fact in a commercial advertisement about its own or another's product.
Judge Hamilton found that Apple had produced no evidence to support the proposition that Amazon had made a false statement about the nature, qualities or characteristics of Amazon Appstore. In particular, the mere use of the term ‘appstore’ by Amazon to designate a site for viewing and downloading or purchasing apps could not be intended as a representation that the nature, characteristics or qualities of Amazon Appstore were the same as that of Apple App Store. In particular, Apple had failed to demonstrate that consumers either understood the term ‘appstore’ as including specific qualities or characteristics or attributes of Apple App Store, or were misled by Amazon's use of this term.
Practical significance
Although the court has yet to decide whether Amazon infringed Apple's trade mark, the order that dismissed the claim for false advertising is likely to have impaired Apple's chances of success in this respect.
Moreover, should the court decide in favour of Amazon, it might become difficult for the USPTO to reject Microsoft's opposition asserting the generic character of the term ‘appstore’. This could have effects also in Europe, and indeed influence the outcome of the cancellation requests that Amazon, Nokia and Microsoft filed independently with the Office of Harmonisation for the Internal Market in 2011, seeking the cancellation for invalidity of Community trade mark No 005 554 779 ‘APPSTORE’, which Apple registered in 2009 in Classes 35 and 42 of the Nice Agreement.
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