Apple Suffers Setbacks in Lawsuit against Amazon
Earlier this month, the U.S. District Court for the Northern District of California in Oakland, granted Amazon.com Inc.’s motion for partial summary judgment to dismiss Apple’s false advertising claim against Amazon for the use of “app store.”
The original lawsuit was filed in March 2011, alleging trademark infringement, false designation of origin and false description, and unfair competition, as Amazon was using the term to solicit software developers. Apple applied to the U.S. Patent and Trademark office to register “APP STORE” in 2008, but Microsoft Corp. opposed the registration (claiming the term is generic); the opposition proceedings in the Trademark Trials and Appeals Board are on hold pending the outcome of this lawsuit.
The false advertising claim was added to the lawsuit in November 2011 after Amazon began to call its app store “Amazon Appstore” instead of the original “Amazon Appstore for Android.” Apple argued that the “APP STORE” terminology could deceive customers into believing that “Amazon Appstore” provides the qualities of Apple’s “APP STORE,” thus, influence customers’ purchasing decisions and divert revenues from Apple to Amazon.” Furthermore, Apple alleged that the “Amazon’s use is . . . likely to lessen the goodwill associated with Apple . . . by associating Apple’s APP STORE service with the inferior qualities of Amazon’s services.”
In response to the false advertising claim, Amazon stated that the term “app store” has become generic, thus the use of it could not constitute false advertising as Amazon does not have exclusive right to use, and noted the use of the term by Apple’s Chief Executive Tim Cook (and Steve Jobs) to discuss rivals. Unfortunately for Apple, U.S. District Judge Phyllis Hamilton found that the “mere use of ‘Appstore’ by Amazon . . . cannot be construed as a representation” that Amazon’s services were the same as Apple’s, and Apple had failed to establish that Amazon made any false statements or actually deceived a “substantial” number of consumers as required under the Lanham Act. Although, Judge Hamilton found in favor of Amazon, she previously determined that the term was not purely generic, but did not establish “a likelihood of confusion” between Apple and Amazon’s services, when rejecting Apple’s request for an injunction against Amazon in July of 2012.
Although the lawsuit is scheduled for trial on August 19, 2013, U.S. Magistrate Judge Elizabeth Laporte ordered Apple and Amazon to hold settlement talks on March 21, 2013. If the settlement talks do not succeed, it will certainly be an interesting trial.
The case is Apple Inc. v. Amazon.com Inc., No. 11-01327 (N.D. Cal. filed Mar. 18, 2011).