Amazon wins battle, but not war over "App Store” term
By Chantal Tode
January 3, 2013
Amazon has won a battle with Apple over the use of the term “App Store” but the war is still to be fought with no decision yet over claims that the online retailing giant infringed Apple’s trademark.
Amazon launched the Amazon Appstore in March of 2011. Apple quickly followed with a lawsuit claiming Amazon’s use of the term is causing confusion for consumers, an allegation refuted by Amazon on the ground that the term is generic and Apple does not have exclusive rights to it. Yesterday, a U.S. judge granted Amazon’s motion for partial summary judgment, saying Apple has not proven that Amazon engaged in false advertising.
“False advertising has one burden of proof – you have to have intent to deceive,” said Carl Howe, vice president of research and data sciences at Yankee Group, Boston. “On the trademark issue, you just have to have an infringement – it is a very different legal issue.
“I would say this is a stayed-tuned issue,” he said. “It doesn’t mean that the story is over and it doesn’t mean that Amazon gets to use the term, just that nobody found they were using false advertising.”
The naming game
In the original lawsuit, Apple claimed the value of its App Store is being harmed by Amazon’s introduction of its own Amazon Appstore.
Amazon claimed that the term app store has become so generic that using it does not constitute false advertising.
The judge’s ruling yesterday said Apple has failed to establish that Amazon made any false statements or that it deceived a substantial segment of its audience.
However, the other claims in the suit by Apple still have not been decided, including trademark infringement. A trial on the remaining claims is set for August.
In the year and a half that the suit has been going on, others have stayed away from using the term “App Store.” For example, Google Play was chosen as the name for the Android application distribution platform.
It is still possible that Amazon may also decide to eschew the term app store for another, potentially less costly alternative.
“The suit has made everyone a little cautious,” Mr. Howe said. “Frankly, a lot of people steered away from the term.
“Amazon may come to that decision, too,” he said. “Because with trademark infringement, they have to actually pay Apple money.”
The level of competition between Apple and Amazon continue to grow.
Amazon launched the Kindle Fire tablet in late 2011 as a smaller, less expensive alternative to the iPad tablet.
The success of the Kindle Fire was at least partially behind Apple’s launch of its own smaller tablet, the iPad mini, late last year.
The two also have been at odds over the issue of ebook pricing. However, a settlement reached between the Department of Justice and several book publishers over allegations of price fixing appears to favor Amazon by enabling it to once again sell competitively priced ebooks and attract consumers to its tablets as a result (see story).
“Apple and Amazon are competitors in some markets and friends in other markets,” Mr. Howe said.
“Clearly Amazon still sells Apple gear but, in terms of services and transactions, they are increasingly going to compete.”
Chantal Tode is associate editor on Mobile Marketer, New York
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