Friday, July 8, 2011

Apple Denied Exclusive Use of the Term 'App Store'

Apple may have first used the term "app store," but a judge has refused a preliminary injunction that would allow the company exclusive use. While the legal battle over a term that was unknown a few years ago is likely to continue, "App Store" may now gain more widespread use in the industry.

On Wednesday, District Judge Phyllis J. Hamilton of the U.S. District Court in the Northern District of California issued an 18-page opinion that denied Apple's request to prevent from using "App Store." But the matter now continues forward legally, with a trial date set by Hamilton for October 15 of next year. Apple filed the suit in March.

'Famous,' Not 'Prominent'

One of Apple's arguments in its suit was that Amazon, whose Internet-based app store carries apps for the Android platform as well as for Apple's, would cause confusion among consumers who were used to "App Store" meaning Apple's apps. Hamilton found that there was no evidence of such confusion, nor of any effort by Amazon to create a connection between Android apps and Apple's.

Amazon has said that "App Store" is now a generic term, and that Apple's online store is only one example of a place where customers can find and purchase apps. In the ruling, the judge found that "Amazon Appstore for Android" was a fair use that Apple could not prevent.

In her opinion, Judge Hamilton wrote that "Apple has not established a likelihood of success on its dilution claim." She said that the company has not demonstrated App Store "is famous, in the sense of being 'prominent' and 'renowned.'"

Hamilton did agree that Apple has spent a lot on ads and publicity, and has sold "a large number of apps" from the App Store. But she wrote that there is also evidence App Store is being used by other companies, in addition to Amazon, to describe what their store contains.

'Enormously Important'

Amazon has also contended that its use of app store is not as a trademark, but as a descriptive term of what customers can find there.

Laura DiDio, an analyst with Information Technology Intelligence Corp., said that " 'App Store' is enormously important to Apple, since the more exclusively it can use the term, the better for its sales."

She added that Apple, "like all companies, likes to be in control," and, if the company can no longer use App Store as its exclusive name, "it will have an impact." But, DiDio said, it's "hard to tell at this point" what kind of impact that might be.

DiDio is optimistic that Apple can figure out how to deal with the loss, if that is the eventual outcome. "Apple is nothing if not nimble and innovative," she said, and, if they can't keep exclusive use of App Store, "they're going to make other companies spend a lot of money to keep up with them."

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