Apple's APP STORE mark held to lack capacity to distinguish

Australia

In Apple Inc v Registrar of Trademarks ([2014] FCA 1304, December 3 2014), the Federal Court of Australia has dismissed an appeal from the decision of the registrar of trademarks not to accept Apple’s application for the registration of the words APP STORE.

On July 18 2008 Apple filed an application for the word mark APP STORE in respect of certain services falling within Classes 35, 38 and 42 of the Nice Classification. The registrar, following a hearing, rejected the application pursuant to Section 41(6) of the Trademarks Act 1995 (Cth) on the basis that the mark was not “inherently adapted” to distinguish Apple’s designated services.

On appeal to the court, Justice Yates described Section 41 as a statutory “decision tree” and Sub-section 41(2) as its “pivotal provision” because it requires that a trademark application must be rejected if the mark is not capable of distinguishing the applicant’s services from the services of other persons.

Turning to the well-known authorities on Section 41, his Honour referred to what he described as the “classic statement” of Justice Kitto in Clark Equipment Co v Registrar of Trademarks ([1964] HCA 55), in which the latter referred to “the common right of the public to make honest use of words forming part of the common heritage for the sake of the signification which they ordinarily bear”.

In deciding that the words 'App Store' are not capable of distinguishing Apple’s designated services, his Honour made the following observations about the mark and the matters that he considered relevant in reaching his conclusion:

  • New words and phrases will enter the vernacular and their “newness” will not necessarily exclude them from the “common heritage” if they nevertheless function descriptively.

  • The mark in question was simply the words 'App Store' and not limited by stylistic or device elements. If registered, Apple would therefore have been entitled to a monopoly in the use of those words in either a stylised or plain form, with or without capitalisation or partial capitalisation and whether or not device elements are used.

  • The designated services included “retail store services” but there was no express limitation in that description as to how the retail store service is supplied (ie, that description was apt to include services supplied from a physical “over the counter” store or by electronic means).

  • Even if Apple was the first to use the expression 'App Store', it would not necessarily follow that APP STORE was inherently adapted to distinguish the designated services because, generally speaking, even “newly-coined” expressions will not be taken to be inherently adapted to distinguish if they are nonetheless ordinary English words that are descriptive of the relevant services (ie, where the words retain the “signification which they bear as a matter of ordinary language”).

  • The view that individuals are likely to perceive a strong association between 'app', 'application' and 'Apple' is because of the reference to the word 'Apple' (being extraneous to the mark applied for and hence not relevant).

  • Ultimately, and crucially in this case, despite Apple’s survey evidence and that of its linguistic experts, his Honour was satisfied on the facts that, well before 2008, the words 'app' and 'store' each had a well-established, well-understood and a “received meaning” (not limited to IT experts):

    • in the case of 'app', as a shorthand expression for application software (as opposed to operating system software); and

    • in the case of 'store', as not confined to the traditional notion of a physical store, but which extended to online stores.

In addition to these substantive issues, his Honour also addressed the technical issue as to whether an earlier Convention-based priority date, as opposed to the actual (later) filing date, is the correct date for considering the application of Section 41. The registrar argued that the priority date derived from the earlier Convention application (March 7 2008) was the applicable date, including for the purpose of considering factual distinctiveness under Section 41(6). Apple argued that the actual (and later) filing date in Australia (July 18 2008) was the applicable date.

Notwithstanding what was said in Austereo Pty Ltd v DMG Radio (Australia) Pty Ltd ([2004] FCA 968) and Chocolaterie Guylian NV v Registrar of Trademarks ([2009] FCA 891) (and in rejecting the registrar’s submissions on this point), his Honour focused on the structure of Section 41 as a whole (the “decision tree” as he referred to it earlier). Thus, in order to give Section 41 an “harmonious operation”, the questions posed by Section 41(3) and Section 41(5) should be decided at the same conceptual date that applies for Section 41(6), being the actual filing date of the application in Australia. His Honour could discern “no reason of statutory construction” for substituting “the priority date” for “the filing date” in Section 41(6).

The APP STORE judgment was delivered on the same day that the High Court of Australia delivered its judgment in Cantarella Bros Pty Limited v Modena Trading Pty Limited ([2014] HCA 48) in which it allowed an appeal from the earlier decision of the Full Court of the Federal Court in Modena Trading Pty Ltd v Cantarella Bros Pty Ltd ((2013) 215 FCR 16). For obvious reasons, the High Court’s judgment was not available to Justice Yates and was not the subject of argument before his Honour. With respect, Justice Yates quite rightly follows and relies (in part) on the Full Court decision in Modena. However, it is this author’s view that the High Court’s reasons for overturning the Full Court’s decision in Modena do not impact on Justice Yates’ reasoning and conclusion in the APP STORE case (and the bracketed words in Paragraph 210 of his Honour’s judgment, although a nod, in passing, to the Full Court’s decision, do not alter my view in this regard).

Apple registered the trademark APPSTORE (as one word) in 2006 (Registration No 1156967). The specification of services is narrower and more precise than the specification in the present case, but an interesting issue is whether the 2006 registration, if challenged, would now be cancelled by the court.

Julian Gyngell, Kepdowrie Chambers, Wahroonga

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