APP Store Saga Shows How to Pick a Trade Mark
When choosing a trade mark businesses often prefer descriptive marks that inform consumers about the nature or purpose of a product. From a legal standpoint a trade mark should be distinctive. This means that it must not describe any feature of the product or be reasonably required for use by others. It can be an invented word like KODAK, or if an ordinary word it must be used outside of its normal context, such as APPLE for computers.
When therefore Apple Inc. adopted the trade mark APP STORE to sell software applications for mobile devices its choice of trade mark sparked interest. As with most things Apple the APP STORE service was an instant commercial success with an alleged average of over a million downloads taking place, in 2011, in every hour internationally on more than 250 million devices resulting in over 18 billion software downloads.
Before long Microsoft Corp. had launched opposition proceedings in the USA against Apple’s application to register the APP STORE trade mark. Apple soon discovered that Amazon.com Inc. had launched its own mobile software download service using “APPSTORE”. Legal action against Amazon soon followed in the USA. In Europe, Amazon and Microsoft have joined forces with Nokia, HTC and others in attempting to invalidate Apple’s registration of the APP STORE trade mark over the Union countries.
Recent events suggest that the momentum in these clashes is currently against Apple as it struggles to defend its argument that APP STORE is not generic. If a mark is generic it is open for use by all in the industry. In an unexpected turn of events Apple announced recently that its lawsuit in the USA against Amazon has been settled. In a statement it said:
“with more than 900 000 apps and 50 billion downloads, customers know where they can purchase their favourite apps. We no longer see a need to pursue our case against Amazon”.
It is tempting to conclude that Apple’s about-face in the USA is due to the difficulty of enforcing a descriptive trade mark. It is simply not easy to prevent third parties from copying a descriptive mark. A monopoly over a mark seen as descriptive in the industry is difficult to defend. Now that Apple appears to be giving up the fight in the USA it will be interesting to see if it manages any victories over the APP STORE mark in Europe.
In South Africa the Trade Marks Act, 194 of 1993, allows scope for descriptive trade marks by providing that a mark should not be refused registration simply because it is descriptive or has become generic, and if registered it should not be removed from the Register, provided that the mark has in fact become capable of distinguishing. This means that a descriptive mark may be enforceable if it has been used extensively or widely promoted such that it actually identifies the products of one business.
When encountered with a descriptive trade mark a South African court must ask whether, at that date, the mark is in fact capable of distinguishing the products of the business in question. Evidence of extensive use of a descriptive mark should generally be sufficient to prove that the mark designates the products of one business, unless of-course there are other circumstances present that cause the effect of the proven use to be deflected in another direction.
If a sizeable portion of Apple’s 50 billion downloads had been carried out by locals the possibility exists that the APP STORE trade mark would be enforceable locally on account of market recognition.
If, however, a significant portion of the local market uses Amazon’s “APPSTORE” it would be difficult for Apple to prove that the APP STORE mark identifies only its products. The primary condition for qualification as a trade mark, namely, distinctiveness, would not have been met.
This issue ought to be considered prior to adopting a descriptive trade mark. The APP STORE saga illustrates that sometimes even substantial marketing expenditure and wide use may not be enough to achieve distinctiveness for a descriptive mark.
Compiled by Reggie Dlamini (Senior Associate - Spoor & Fisher)