Apple defeats infringement claims in IBOOKS case

United States of America

On a motion for summary judgment, in JT Colby & Company Inc v Apple Inc, Apple has defeated claims that its IBOOKS mark for e-reader software infringed the plaintiffs’ common law rights in the mark IBOOKS for use with a publishing imprint used for books published primarily in hard copy, but occasionally available as e-books.

As a threshold matter, the district court held that the plaintiffs did not prove protectable rights in IBOOKS. Without a federal registration, the plaintiffs had the burden to prove that its mark was protectable. The plaintiffs’ burden was rather high, as IBOOKS was considered a descriptive mark based on precedent (particularly from the US Patent and Trademark Office (USPTO)) that marks combining the initial letter 'i' with a generic term are descriptive of internet-related goods/services. 

Even though the mark had been used since 1999, the evidence showed that sales were highest between 1999 and 2006. After 2006, the owner of the company who developed the mark died, and the company went into bankruptcy. The plaintiffs purchased the company’s assets out of bankruptcy, but the sales were never significant from that point. The decline in sales showed that consumers were less likely to recognise the mark in recent years than they might have been previously. Moreover, the relatively low purchase price for the assets of the bankrupt company suggested that the mark was not strong. Also weighing against a protectable mark was the USPTO’s refusal to register the mark to its original owner on distinctiveness grounds and statements made by the plaintiffs’ predecessor in trying to overcome the refusals. 

Another significant factor was the use by the plaintiffs of the mark in a design format, with a dominant lightbulb logo with an 'i' in it depicted above the word 'ibooks'. The court reasoned that sales/marketing could not be attributed solely to the word 'ibooks' and that consumers’ recognition of the mark likewise could not be attributed to the word mark separately from the prominent logo.

Despite finding no legally recognisable trademark rights in the plaintiffs’ mark, the court nevertheless undertook a likelihood of confusion analysis. The plaintiffs’ claims were premised on reverse confusion - ie, that consumers would assume that the plaintiffs’ goods were affiliated with Apple’s e-reader software. The likelihood of confusion analysis nevertheless involves the same factors as with a case of forward confusion. Again, the plaintiffs’ failure to demonstrate strong rights in its claimed mark weighed against it. Perhaps the only factor weighing in the plaintiffs’ favour was the strength of Apple’s mark. Nevertheless, the court again relied on the plaintiffs’ prominent logo, but this time to distinguish the parties’ marks. Additionally, the court found that the products were not competitive and were offered through different trade channels. Also weighing in Apple’s favour was its reliance on a trademark search and opinion of counsel as well as its purchase of a prior registration of IBOOK by a third party. 

The case is instructive in showing the value of a federal registration and/or having strong protectable rights before embarking on an infringement case. It is significant to note that the plaintiffs were backed by a litigation-funding firm who had a stake in any recovery the plaintiffs might have received. 

Karin Segall, Leason Ellis LLP, White Plains

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