Bloomberg News

Apple Bid to Bar Amazon ‘Appstore’ Will ‘Likely’ Be Denied

June 22, 2011

(Updates with judge’s comment in third paragraph.)

June 22 (Bloomberg) -- Apple Inc. will “probably” lose its court bid to stop Amazon.com Inc. from using the term “Appstore” for a service selling programs for Android devices, a federal judge said.

Apple, whose top-selling product is the iPhone, claimed it would be irreparably harmed because the value of its own App Store will be eroded as consumers confuse the two services.

U.S. District Judge Phyllis Hamilton said today after a hearing in Oakland, California, that she is “probably” going to deny the motion because Apple hasn’t demonstrated confusion among consumers. Hamilton said she will review court filings before issuing a final decision.

Apple’s difficulty demonstrating “real evidence of actual confusion” among consumers is a “stumbling block for Apple,” Hamilton said in court. “I’m troubled by the showing that you’ve made so far, but that’s where you’re likely not to prevail at this early juncture.”

Like “honeybaked ham,” a product made by a Michigan company, App Store has come to be identified by consumers as an Apple service selling downloadable programs for the iPhone and other company devices, Apple said in court filings.

Apple has spent hundreds of millions of dollars advertising the service since it was launched in 2008 and will suffer irreparable damage by associations with Amazon’s Appstore service, which provides fewer safeguards against viruses and data security issues, the company’s filings said.

Amy Bessette, a spokeswoman for Apple, declined to comment.

Trademark Infringement

Apple, based in Cupertino, California, sued Seattle-based Amazon for trademark infringement in March and asked for a preliminary court order barring the online retailer’s use of “Appstore,” pending the outcome of the lawsuit.

Amazon says the words “App Store” are generic and Apple doesn’t have exclusive rights over them. Even if the term wasn’t generic, Apple can’t show that consumers would confuse the two services because Apple’s service only sells downloads for the iPhone and other Apple devices, Amazon said in court filings.

The largest online retailer is seeking dismissal of Apple’s lawsuit and a court order allowing it to use the term to sell programs for Android devices. Android is the Google Inc. operating system used by handset makers including Samsung Electronics Co., HTC Corp. and Motorola Mobility Holdings Inc.

Amazon’s Appstore offering downloads of software for Android devices opened March 22.

The case is Apple Inc. v. Amazon.com Inc., 11-01327, U.S. District Court, Northern District of California (Oakland).

--Editor: Mary Romano, Peter Blumberg

To contact the reporters on this story: Karen Gullo in San Francisco at kgullo@bloomberg.net; Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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