January 10, 2013

Apple's False Advertising Claim Fails for Lack of a False Statement

Consumer Advertising Law Blog

On January 2, 2013, the US District Court for the Northern District of California granted partial summary judgment in favor of Amazon on a false advertising claim brought by Apple, which argued that Amazon's use of the word "Appstore" falsely implies an association with Apple's App Store.

In the lawsuit, Apple claims that Amazon's use of "Appstore" as the name of its online store, where consumers can purchase applications for use on Android and Kindle devices, infringes and dilutes Apple's alleged trademark rights in "APP STORE." Amazon argues that "app store" is generic in the same way that phrases such as "camera store" or "grocery store" are generic. Amazon also contends that there is no likelihood of confusion because consumers understand that in order to purchase apps for their Apple devices, they must go to Apple's App Store. While Apple owns trademark registrations for APP STORE in several countries internationally, Microsoft challenged Apple's application to register the mark in the United States. That dispute is the subject of a proceeding before the Trademark Trial and Appeal Board and has been stayed pending the outcome of the litigation between Apple and Amazon.

In addition to its trademark claims, Apple claimed that Amazon's use of "Appstore" reached beyond simply trademark infringement and dilution; Apple contended that the use of the term "Appstore" constituted false advertising.

In granting summary judgment on the false advertising claim, the court focused on "whether Amazon made a false statement of fact in a commercial advertisement about its own or another's product." Apple did not argue that Amazon had made an affirmative false statement about "the nature, characteristics, or quality" of Amazon's Appstore. Instead Apple contended that Amazon's use of the word "Appstore" falsely implied an association with Apple and deceived consumers by making them think that Amazon's Appstore would share the same characteristics as, and offer as many applications as, Apple's App Store.The court explained in its opinion that while an express or explicit statement of fact is not required to state a claim for false advertising, "if an advertisement is not false on its face… the plaintiff must produce evidence, usually in the form of market research or consumer surveys, showing exactly what message was conveyed that was sufficient to constitute false advertising." The court found that Apple had offered no evidence that consumers had an expectation that the Amazon Appstore would have specific qualities or characteristics of the Apple APP STORE, "particularly given that Apple APP STORE sells apps solely for Apple devices, while the Amazon Appstore sells apps solely for Android and Kindle devices."

Apple's other claims for trademark infringement, false designation or origin, false description, dilution, and unfair competition remain to be decided in the case.

© Arnold & Porter Kaye Scholer LLP 2013 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.

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