Apple Inc.’s APP STORE mark lacks any capacity to distinguish – for now

13-Mar-2013

Apple Inc. (“Apple”) has had its application for APP STORE refused by the Australian Trade Marks Office on the ground that the mark is not capable of distinguishing Apple’s services from those of other traders.1

Background

The application was filed on 18 July 2008 (claiming priority from an application filed in Trinidad and Tobago on 7 March 2008) for a range of services relating to Apple’s APP STORE platform in classes 35, 38 and 42. Apple launched its APP STORE platform worldwide on 11 July 2008.

A prior registration for APPSTORE in classes 35 and 42 which initially blocked the application was acquired by Apple, allowing the application to proceed to acceptance. However, acceptance was revoked by the examiner prior to registration on the ground that the mark was not capable of distinguishing Apple’s services from those of other traders.

A lengthy prosecution ensued, including the filing of evidence of use of the APP STORE trade mark in Australia and elsewhere, expert evidence of the linguistic implications of the expression APP STORE, and survey evidence conducted in September 2011 indicating that about 79% of people surveyed had heard of the expression APP STORE.

Ultimately, the examiner was prepared to accept the application in respect of telecommunication and software related services in classes 38 and 42, but intended to refuse the application in respect of retailing of software in class 35 on the ground that the examiner was not satisfied that the mark does or will distinguish Apple’s services under s 41(5) of the Trade Marks Act 1995 (Cth).

Apple requested a hearing in the matter before a Delegate of the Registrar of Trade Marks.

The Decision

Although Apple’s request for a hearing was only in relation to the examiner’s intention to refuse the application in class 35 under s 41(5), the Hearing Officer took the view that, given the directly descriptive nature of the expression APP STORE, the mark did not have any inherent adaptation to distinguish Apple’s services in classes 35, 38 or 42. Consequently, the Hearing Officer considered that the more onerous test under s 41(6) applied to the entirety of Apple’s application, meaning that only evidence of acquired distinctiveness before the filing date could be used to establish that the mark does in fact distinguish Apple’s services from those of other traders.

Notwithstanding the above, the Hearing Officer went on to consider Apple’s evidence under s 41(5) on the basis that if the evidence was insufficient to overcome the s 41(5) ground of refusal, that same evidence would not overcome s 41(6).

The Hearing Officer gave little weight to the prior registration for APPSTORE acquired by Apple in classes 35 and 42 (which was found to be inherently distinctive) because it was not possible to ascertain whether appropriate research was ever conducted during examination of the prior application to determine whether APPSTORE had any descriptive meaning. The Hearing Officer rejected Apple’s argument that acceptance of the earlier application meant that the current application for APP STORE was prima facie capable of distinguishing Apple’s services. The fact that the earlier application was filed by an unrelated third party worked against Apple because it showed that other traders were indeed likely to think of the mark and want to use it for their own services.

In the end, the Hearing Officer found that the evidence only showed that APP STORE was a limping mark which was usually accompanied by other, well known, Apple marks. In the Hearing Officer’s view, there was very little evidence of use of the mark APP STORE solus to overcome its otherwise descriptive meaning.

On 12 March 2013, Apple appealed the decision of the Australian Trade Marks Office to the Federal Court. The matter will now be conducted as a hearing de novo in which the Court can consider new evidence and argument. It remains to be seen how Apple will reargue its case in light of the Hearing Officer’s decision.

Conclusion

Although the matter will be reheard, the decision highlights the importance of preparing evidence that establishes that the actual mark under consideration is acting as a badge of origin.

Further, the Intellectual Property Laws Amendment (Raising the Bar) Act 2012, which comes into effect on 15 April 2013, rewords s 41 to ensure that the ‘presumption of registrability’ applies to an assessment of whether a mark is capable of distinguishing. This may have assisted Apple in this instance.

Finally, it is worth noting that in some instances securing registration of a mark is not essential to extracting value from the mark. Good trade mark practitioners appreciate that marketers want to convey messages about their products and services to consumers as quickly and effectively as possible. From a marketing perspective, it is easier to familiarise consumers with a product through innovative uses of descriptive marks than with invented marks. For this reason, effective use of descriptive marks together with strong, registrable trade marks is to be encouraged as part of a broader marketing strategy.

Given that 10 million applications were downloaded in the first three days of operation, and 5.5 billion in the first year, in this instance the adoption of a descriptive mark accompanied by other Apple marks clearly did not constitute a barrier to success.

By Sean McGuire

1 Apple Inc. [2013] ATMO 13 (22 February 2013)