Antitrust Law Daily Wrap Up, FALSE ADVERTISING—NDCal: Amazon’s Use of “Appstore” Term Was Not False Advertising of Its Download Service, (Jan 3, 2013)

By E. Darius Sturmer, J.D.

E-tail giant Amazon’s use of the term “Appstore” in association with its mobile download service did not constitute a false advertisement violative of Lanham Act, Sec. 43(a), the federal court in Oakland, California, has held (Apple Inc. v. Amazon.com, Inc., January 2, 2013, Hamilton, P.). A complaint filed against Amazon by Apple Inc. had asserted that use of the term misrepresented the nature, characteristics, and qualities of the service and deceived or tended to deceive consumers into believing that Amazon’s service resembled Apple Inc.’s own “APP STORE” service. However, the court decided, Apple failed to demonstrate any affirmative or implied false statement made by Amazon in commercial advertising or to establish that Amazon’s use of the term had any tendency to mislead consumers. A motion for partial summary judgment against Apple’s Lanham Act claim was therefore granted.

Apple applied to the U.S. Patent and Trademark Office in 2008 for registration of an “APP STORE” trademark, and a later challenge to the mark by Microsoft (which believes the term to be generic) is on hold pending resolution of the matters at issue in the instant trademark infringement/dilution and false advertising litigation between Apple and Amazon.

Apple conceded that it had no evidence Amazon made any affirmative false statement about the nature, characteristics, or quality of the Amazon Appstore for Android or the Amazon Appstore, the court noted. Instead, the company contended in its complaint that actionably false statements could be implied from Amazon’s advertising, in the sense that Amazon’s use of the term “embrace[d] innuendo, indirect intimations, and ambiguous suggestions.”

Authority offered by Apple in support of this theory was inapposite because Apple presented no evidence of any Amazon website or advertisement that attempted to mimic Apple’s site or advertising, the court observed. Moreover, the holding in the judgment cited by Apple, TrafficSchool.com, Inc. v. Edriver Inc., 653 F.3d 820 (9th Cir. 2011) rested in part on evidence of customer confusion that was entirely absent from the present case.

Other rulings relied upon by Apple for the implied falsity theory were centered on advertisements found impliedly false or misleading through evidence that included customer surveys and dictionary definitions. None of those cases was “noticeably relevant to the question of whether [Apple] has provided evidence in this case sufficient to support the first element of the false advertising claim”—whether Amazon “made a false statement of fact in a commercial advertisement about its own or another’s product,” the court explained.

The court “[found] no support for the proposition that Amazon expressly or impliedly communicated that its Appstore for Android possessed the characteristics and qualities that the public has come to expect from the Apple APP STORE and/or Apple products.” Apple presented no evidence that consumers or customers understood “app store” to include specific qualities or attributes of the Apple APP STORE, or that any were misled by Amazon’s use of the term. While Apple’s service offered many more apps, and those apps were purportedly better integrated with the devices for which they were created, there was no indication that consumers expected the same from Amazon’s service on the basis of the “Appstore” term, the court concluded.

The case is No. C 11-1327 PJH.

David R. Eberhart (O'Melveny & Myers LLP) for Apple Inc. Martin R. Glick (Arnold & Porter LLC) for Amazon.com, Inc.

Cases: Advertising CaliforniaNews