Thursday, 4 December 2014

Sour Apple after Federal Court of Australia denies 'App Store' trade mark

The Federal Court of Australia has upheld the Australian Trade Marks Office’s decision (TMO) to refuse to register Apple’s trade mark application for ‘APP STORE’.

Apple has been using the term ‘APP STORE’ since 2008.  In 2013, the TMO ruled that the term ‘APP STORE’ does not distinguish the goods and services of Apple from the goods and services of other traders as the terms ‘app’ and ’store’ had each been in common use before Apple’s ‘APP STORE’ was in use.

Apple appealed the decision to the Federal Court where Justice Yates held that the term ‘APP STORE’ was too broadly descriptive to be registered as trade mark.  He ruled that consumers would have understood the term ‘APP STORE’ to mean no more than an expression to describe a trade channel (a store) by or through which application software could be acquired.  Apple’s submissions did not persuade the Court otherwise.

Apple will still be able to use the unregistered term ‘APP STORE’ in respect of its goods and services in Australia.

Interestingly, in 2006 Apple secured a trade mark registration in Australia for the term 'APPSTORE' without a space in respect of services including operating online marketplaces for buying, selling and exchanging computer software and on demand applications, in addition to application service provider services.  Apple may rely on this registration to restrict others from using the term 'APPSTORE' in respect of such services; however it may be difficult to enforce this registration against other traders in light of the recent decision.

Following the Federal Court’s decision, the ‘APPSTORE’ registration may be challenged by third parties who use the term on the grounds that the term has become generic and is no longer distinctive of Apple’s services.  However this would be a very costly exercise.

This decision is a timely reminder that irrespective of how much a mark is used in the marketplace, if the terms are commonly in use and are descriptive of the goods and services, the mark will not qualify for trade mark registration.  Further, if trade marks that have been registered as trade marks become generic, they may be vulnerable to removal from the Trade Marks Register or difficult to enforce.

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