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International - What APP STORE says about how Microsoft and Apple approach IP

By Adam Smith (1 comment)
May 23 2011

It’s not often that a consortium of tech companies band together to fight a trademark registration. It’s even less often that they talk about it. But now that the dispute over APP STORE has gone global, the spat offers a fascinating insight into how Microsoft talks about intellectual property, and how Apple does not.

The spat pitches Microsoft, Amazon.com, HTC Corporation and Sony Ericsson against none other than tech trendsetter Apple, which has applied to register, and has registered, the trademark APP STORE in the United States and the European Union respectively. WTR first reported this case in January, when Microsoft opposed Apple’s US trademark application. In that story, WTR provided a few speculative reasons behind Microsoft’s failure to address Apple’s 2008 CTM registration for APP STORE, including that the app market was not then valuable to Microsoft, which launched its app marketplace only in 2009.

Last week, Microsoft – together with Sony Ericsson and HTC – filed an application for invalidity with OHIM. Among other things, the parties claimed: “The trademark APP STORE consists of a mere combination of two words, each of which is generic or descriptive of characteristics of the services in respect of which it is registered. In such case, the trademark remains generic/descriptive of those characteristics for the purpose of Article 7(1)(b) and (c) CTMR.”

Microsoft is more than happy to speak about APP STORE. Its press machine has won a great deal of the coverage seen so far in the mainstream media, the blogosphere and the IP press. Indeed, the company knows that it cannot expect the internet cacophony not to chat about this story. The latest statement from Redmond reads: “Apple has claimed that it alone has the right to use the phrase ‘App Store’. Today’s filings by HTC, Nokia, Sony Ericsson and Microsoft, like Amazon’s recent action, demonstrate the breadth of opposition to Apple’s unsupportable claim of exclusivity.  ‘App store’, like ‘toy store’ or ‘book store’, is a generic term that should continue to be available for everyone to use for stores that sell apps.”

Microsoft knows that it can talk positively about IP rights. Its entire business is built on patents and copyright (indeed, the copyright in Microsoft’s software is often estimated as the most valuable ever created), and brought to market with precious trademarks. As such, the firm has dedicated staff to communicate its IP successes to the press – the group even has a Twitter account @MicrosoftIP. Microsoft assigns resource to steer discussion about intellectual property as close as possible to where the company wants it. And so it’s no surprise that Microsoft is talking about APP STORE. The case is an opportunity for the company to generate a positive feeling in the mainstream press, which often looks down on IP rights, by making an indirect but populist case that Apple is over-stretching its rights. Furthermore, WTR has heard that Microsoft believes the case to be a slam dunk.

Although Apple is just as reliant on IP rights as Microsoft, it remains silent. The company has released no statements regarding the APP STORE case. Infamous among journalists for refusing to speak, Apple has ignored previous requests by WTR for comment on its IP team and strategy. Apple has argued – in court filings only – that the term is not generic. In one rather puzzling claim, “Apple denies that, based on their common meaning, the words ‘app store’ together denote a store for apps.” One should not expect the company to provide any public comment as to why it is defending the APP STORE trademark.

So what can trademark counsel learn from the opposing strategies of two very successful IP-monetising companies? First, the mainstream and trade presses are very interested in IP rights. Second, as Microsoft demonstrates, you can talk about a pending trademark case in the press – and it can be to your advantage. Third and final, a trademark team is in the unique position of being able to show a mass audience the significance and advantages of trademark rights, all the while telling the perspective of its company.

And one can’t help but note that the dispute over the APP STORE trademarks shows that the marketplace for apps is prized by some of the biggest tech and net-based companies in the world. This raises the question: who is going to apply to run a ‘.app’ top-level domain name registry? And will one entity monopolise it, or sell second-level registrations in that space to competitors?

Comments

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RE: What APP STORE says about how Microsoft and Apple approach IP

Great post!

Emma D Enriquez, Gresham Savage Nolan & Tilden LLP on 24 May 2011 @ 18:46