The Australian Federal Court has dismissed an appeal by Apple from a refusal to register APP STORE as a trade mark in Australia in Apple Inc. v Registrar of Trade Marks [2014] FCA 1304.

Background

Apple filed its application for the mark APP STORE on July 18, 2008. Registration was initially accepted, but then revoked by the Registrar of Trade Marks under Section 38 of Australia’s Trade Marks Act 1995. Apple requested a hearing after which the Registrar declined to register the mark.  Apple then appealed to Australia’s Federal Court.

The central issue here was whether or not APP STORE is a registrable trade mark; that is, whether the sign APP STORE was capable of distinguishing Apple’s designated services from the services of other persons.  Was APP STORE capable of acting as “badge of origin” for Apple’s services in the Australian marketplace?

The Federal Court sided with the Registrar. On December 3, 2014 the Court decided that APP STORE, as of July 18, 2008:

  • had no ability to function as a trade mark;
  • was purely descriptive;
  • and had no inherent ability to distinguish the mark under Australia’s Trade Marks Act 1995.

In making its decision, the Court noted that the words “APP” and “STORE” are common English words. When they are used together these “common words” had a well understood meaning in the English language, noting that:

The changing patterns of commerce and consumer preferences both before and after 2008 do not mean that at the time that Apple launched its app store service and more particularly, at the time it applied for the mark, it had coined a new word ‘app’ or had given that word a changed meaning…

The Court also decided that Apple had not put on sufficient evidence to show APP STORE had come to be associated with its services alone through its use.

Criticisms of the Registrar by Apple

Interestingly, Apple was critical of the role played by the Registrar in this appeal. Specifically, the Federal Court noted that Apple:

…[submitted] that the Registrar had adopted “an overly active role” in the appeal by obtaining evidence that was not before the delegate. … that the Registrar had taken “the remarkable steps of obtaining her own expert evidence and also affidavit evidence from third parties.”  Of particular concern to Apple in this latter regard is the fact that some of the evidence obtained by the Registrar came from the solicitors acting for Microsoft Corporation in Australia, in circumstances where Microsoft Corporation has opposed Apple’s corresponding application for the registration of APP STORE as a trade mark in the United States of America.

It was Apple’s view that, where there is an appeal from the Registrar, in which the applicant is the only party before the Registrar, the Registrar:

  1. should not adduce additional evidence, obtained from third parties, that was not before her delegate;
  2. should not seek to defend her delegate’s primary decision; and that
  3. in such circumstances, the Registrar’s role should be “limited to dealing with questions of general importance that might be raised by the appellant’s submissions.”

The Federal Court  disagreed. Under the Federal Court Rules 2011, the Registrar was a party to the proceeding. While declining to comment on “the metes and bounds of how the Registrar should or should not proceed in an appeal,” the Court noted that case law provides:

  • that the Commissioner of Patents has “the full rights of a party” in a similar position; and
  • that the Registrar of Trade Marks should be so entitled;
  • otherwise there is ‘ no-one to present a view contrary to that of the applicant in the court.’

The next steps for the APP STORE mark?

Apple is at a cross-roads. Apple may seek to file a new application, the issue now being whether or not Apple,

  • can establish through evidence that APP STORE does now in fact function as a badge of origin for its services in the minds of consumers, or
  • whether APP STORE is now considered by consumers to be a generic term to refer to any store where they can purchase ‘apps’.

It may be that the average consumer thinks first, if not only, of Apple’s services when referring to the APP STORE (as opposed to any competitor’s ‘app store’).

Nonetheless, other traders do now refer to their own services in that fashion (such as Amazon.com.au’s Appstore for Android or the Shopify App Store) and this will inhibit Apple’s ability to refile and obtain registration through filing further evidence of use. Notably, larger companies Google and Microsoft have not commenced use of the term ‘app store’ descriptively.

The failed appeal does not prevent Apple from using APP for sales type services. STORE, but results in a tougher path for Apple attempting to assert rights in the sign. Apple has in fact filed to register APP STORE as a trade mark for class 9 software type items and this application is under examination, and no subsequent application for services appears to have been filed.

 

Source: Apple Inc. v Registrar of Trade Marks [2014] FCA 1304