And What You Can Learn About Trademark Law

In my last post, we set the stage for the trademark conflict between Apple and Amazon over APP STORE, and saw that Apple operated under a number disadvantages.  In particular, Apple lacked a U.S. trademark registration, and was asking the court do so something extraordinary.  We’ll see now that Apple did pretty well despite these problems, but in the end, Amazon was able to carry the day by attacking Apple’s arguments at their points of (seeming) greatest strength.  We’ll also see that a judge wasn’t willing to hold to a lazy, un-nuanced view of eCommerce, and that helped Amazon, too.

Amazon attacked Apple on two fronts.  First, Amazon contended that Apple couldn’t prove that it had a protectable mark in APP STORE.  In fact, Amazon APP STORE wasn’t a mark at all–it was just plain English words.  Second, Amazon contended that no one was likely to be confused between Amazon’s and Apple’s APP STORE, mostly because there wasn’t much to the mark and the applications Amazon wanted to sell wouldn’t work on Apple products.*

* You might ask why Amazon didn’t attack Apple very hard on irreparable harm.  That’s because, in trademark law, irreparable harm is actually pretty easy to prove.  Courts are generally sympathetic to the idea that once the seed of confusion is allowed to take root in the consumers’ minds, it is nearly impossible to uproot.

Amazon just needed to win one of these arguments to stop Apple.  At first glance, you might think the first argument had the better chance.  After all, what kind of mark is APP STORE anyway?  It’s a commonly-used abbreviated form of application, plus the word store.  Isn’t that a bit like calling your vegetable stand the Vegetable Store?  And that’s pretty much what Amazon argued.  In legal terms, Amazon argued that APP STORE was “generic.”  A mark is “generic” if all it does it describe the class of goods or services being offered.  This is an important concept.  Without it, companies would, in a sense, slowly take over our language and common symbolism.

The “generic” defense is a “home-run” defense because not only do you win if you’re successful, but you destroy the mark.  The mark falls into the public domain:  it’s just words.  Amazon’s problem is that the defense almost never succeeds, perhaps for this very reason.  In the world of home-run defenses, it’s one of the longer balls.  In the end, the court wasn’t willing to go that far.  Although app store sounds like a place where you sell “apps,” Amazon couldn’t show that the term had entered common parlance to mean “website where computer applications are sold (well, technically licensed).”  With the question this close, the court was probably right to be conservative and reject Amazon’s argument.**

** Amazon might be able later to come up with better evidence that the term has been commonly used in this way, but it didn’t have time here.  Interestingly, there is a fairly old (circa 2000) trademark application for APPSTORE, which was abandoned, so APP STORE wasn’t an entirely new term in 2008–or maybe someone was just prescient in 2000.

What APP STORE is, according to the court, is “descriptive.”  That’s much better for Apple than “generic,” to be sure, because it keeps the ball alive–but it still leaves Apple with a tough shot.  Ideally, the court would have found to mark to be “suggestive” (like GREYHOUND for buses, which suggests speed), “arbitrary” (like APPLE for computers), or “fanciful” (like KODAK for cameras–and pretty much anything else).  Marks in those categories are automatically deemed protectable.  Descriptive marks, on the other hand, force you to come up with some really hard proof–proof that consumers have already come to associate the mark with the goods or services being offered.  I think you can quickly imagine a number of challenges in proving, through admissible evidence (no hearsay!), what a large abstract group of consumers thinks about a particular mark.***

*** This isn’t to say Apple was doomed, just that the odds were stacked.  There are plenty of protectable descriptive marks, such as WINDOWS® for an operating system based on input panes that were generally known at the time as windows; or FROSTED MINI WHEATS; or, to take a more relevant example, COMPUTERLAND, for a store that sold computers.

As it turns out, Apple had this base fairly well covered, but not convincingly so.  The way one would normally prove this is through consumer surveys, conducted and explained in court by an expert in such things.  Apple seems not to have time for that (consumer surveys can’t be rushed), so they cobbled together some evidence, anchored by an expert analysis of the use of APP STORE in news stories.  It was enough to make the court punt the issue.  She ended up deciding that APP STORE was a potentially protectable mark and that she was just going to assume for the time being that APP STORE was protectable.  Apple had cleared one hurdle.

The court turned its attention to Amazon’s second line of attack, that consumers were not likely to be confused by Amazon’s and Apple’s uses of APP STORE.  At first glance, this appears to be a hard argument for Amazon to make.  Apple’s and Amazon’s use exactly the same mark, for the same sort of goods, directed to the same sort of consumers, using the same marketing channel.

But Amazon made two clever arguments that undercut Apples two strongest points, and they carried the day.  First, Amazon pointed out that the applications it wanted to sell in its APP STORE were for the Android operating system and couldn’t work with Apple’s phones.  Someone looking for Apple’s APP STORE at Amazon’s APP STORE wouldn’t stay confused for long.  In fact, it means that that “someone” wasn’t even the sort of customer Amazon wanted (and the customers Amazon wanted weren’t the ones Apple wanted)–so the target market was arguably different.  The court didn’t completely buy this argument, but it bought enough of it to mute one of Apple’s best points.

Second, Amazon challenged the notion that the Internet is one giant marketing channel.  Amazon argued that its own website constitutes its own marketing channel, and Apple’s another.  Again, the court didn’t completely buy the argument, but it bought enough to negate another of Apple’s stronger points.****

**** Amazon also argued that APP STORE was a “weak” mark, which is true, given that the court had found the mark to be merely descriptive.  Descriptive marks are considered weaker than suggestive marks, which are considered weaker than arbitrary and fanciful marks.  Thus, Apple took a double hit when the court rejected its argument that APP STORE was suggestive.

In the end, the court was unwilling to let a weak mark stop Amazon from using the same mark without a strong showing of likelihood of confusion.  Amazon did just enough to stop Apple, which had just too many obstacles to overcome.  The case, however, isn’t over.  Indeed, technically, it’s just beginning.  Typically, cases like this settle at this point because the irreparable harm that the plaintiff was trying to prevent is now inevitable, and winning the case at the end won’t help.  Also, the court has sent a fairly strong signal that wining at the end is unlikely.  But this may not be a typical case.  Apple is big enough to sustain the irreparable harm, and at trial, it won’t be under many of the burdens that hampered its efforts at the preliminary injunction stage.  It should, for example, have a solid consumer survey, and it might even have a U.S. trademark registration in hand.

This was only half the decision.  The other half involved Apple’s claim for dilution, which is a fascinating subject in its own right.  However, there is an even better recent decision on dilution that we can use to discuss the subject–one involving the stitching on the back of blue jeans–and that will be subject of one of my upcoming few blog posts.  Thanks for reading!