Why Apple Suing Amazon Is the Right Move

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Amazon opened its own app store today for Android devices, and in so doing, it brought down the wrath of Apple. The reason? Amazon is calling its software marketplace the “Appstore,” which, you’ll note, is not unlike Apple’s own “App Store,” where the Mac-maker sells applications for the iPhone, iPad and iPod touch. In its lawsuit, Apple accuses Amazon of infringing on its App Store trademark.

It’s reasonable to think that Apple is being petty by claiming ownership of two commonly used words. The term “app store,” after all, has been around for years; generally speaking, people don’t like it when companies claim rights to relatively neutral language. Critics have trademark law on their side: a company can’t claim exclusive rights when a term is merely descriptive. But that doesn’t mean Apple isn’t justified in going after Amazon.

Apple, after all, was awarded the App Store trademark by the U.S. Patent and Trademark Office in 2010. Microsoft is formally opposing the trademark registration, and an official ruling on that objection is pending. If Microsoft is successful, it could mean the end of Apple’s case against Amazon. Until that happens, however, the iPhone-maker is well within its rights to go after Amazon. Lawyer Evan Brown of Internet Cases explains why the term “App Store” is fair grounds for legal action on Apple’s behalf:

[T]here’s an important exception to the rule of no trademark rights for descriptive terms, and this exception is probably what Apple is relying on: the notion of “acquired distinctiveness.” Simply stated, if a company can show that it has used a descriptive term so extensively that the public has come to associate that descriptive term with the company, the company can claim trademark rights in that term. Apple will no doubt try to show that it has taken great efforts (read: marketing $$) to get the public to associate App Store with its brand. To the extent it can do that, it may have success against Amazon.

What Apple is trying to do is avoid what happened to Kleenex and Xerox: to avoid diluting its brand by allowing words to become part of our lexicon. So while Apple’s App Store may not be the only entity to which the general term “app store” descriptively applies, and even if Apple didn’t coin the term, if people think “Apple” when they hear the term “app store,” the company has a legally defensible position. I find it hard to believe that “app store” specifically is more generally associated with smartphones as a generic category, than with Apple and the iPhone.

And not only can Apple sue, but it should. The App Store has become a very powerful marketing tool and supporting brand for iOS devices. You could argue that the extensive software catalog the App Store provides is now the number one competitive advantage Apple devices have over its competitors. The app gap is narrowing, but it still represents a significant chasm, and one worth vigorously defending. Ceding ownership of the “app store” term would mean losing customer mindshare, which would in turn hasten the decline of its third-party software advantage.

Apple may not make many friends among tech watchers or gadget fans by suing to defend its app store trademark, but just because a course of action is unpopular doesn’t mean it’s wrong. Amazon knew it would be stepping on the tiger’s tail in naming its marketplace the Appstore, and no doubt it, too, was prepared for the consequences. All that remains to be seen now is whether or not the upstart will face a costly rebranding.

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