Apple May Be Losing Its Grip on 'App Store' Name

Wednesday, June 29, 2011

Apple May Be Losing Its Grip on 'App Store' Name

App stores are springing up all over the place, and Apple's contention that it owns the generic name seems sort of like Ace laying claim to "hardware store." Apple is making its case in a lawsuit against Amazon over its "Appstore for Android," but the judge isn't impressed. Failure to win a preliminary injunction won't close the case, though, and there are indications Apple intends to keep fighting.

Apple (Nasdaq: AAPL) will probably lose its bid to gain a preliminary injunction against Amazon (Nasdaq: AMZN) and its use of the term "Appstore," at least based on comments from the federal judge hearing the case.

U.S. District Judge Phyllis Hamilton said after a hearing that she will "probably" deny the motion because Apple hasn't demonstrated that Amazon's use of the term has created confusion.

Before she issues a final decision, she will review the court filings.

Confused by 'Appstore'?

Apple filed suit against Amazon for the etailer's use of the term "Appstore" in March to equal parts eye-rolling and sympathy. Inarguably, Apple was instrumental in introducing "app" into general use.

However, as Amazon has maintained -- and as has been amply demonstrated by other companies and countless consumers -- the words "app" and "store" have taken on a generic cast, applicable to any mobile provider that groups, apps in one location for sale.

Its legal pursuit of companies that insist on using these terms has caused Apple to be likened to a patent troll in some quarters.

Apple maintains that use of the term "Appstore" will create confusion among consumers and that Amazon's laxer policies, especially toward security, could erode its own brand.

Amazon counters that consumers are unlikely to be confused between the two sites as it focuses on apps for Android devices, while Apple sells apps for those running iOS.

Neither company responded to MacNewsWorld's requests to comment for this story.

It's Not Over for Apple

At this stage, Apple does not appear to be fazed by the judge's comments. It has reportedly sent a cease-and-desist letter to another vendor using the name "App Store" -- open source company Amahi, which clearly does not have the same deep pockets to fund a defense as Amazon does.

Not that Apple has lost its bid to lay claim to the term -- not by a long shot, Brinks Hofer Gilson & Lione attorney Scott Slavick told MacNewsWorld.

"There is a higher burden for a preliminary injunction," he said. "I think the judge didn't want to stop Amazon from using the term right now because of that higher burden, but it doesn't mean that Amazon has automatically won the case on its overall merits."

Amazon does have a federal trademark for "Appstore," which is certainly useful to its position, Slavick noted. It also has invested a great deal in marketing around the term, which is also useful.

If Apple doesn't get its preliminary injunction, of course, that will be a victory of sorts for Amazon, he acknowledged. "It will give it leverage in many ways, including possibly settling the matter out of court."

As for Amahi, he speculated, the cease-and-desist letter is probably Apple showing the world that it intends to keep fighting.