Hunt & Hunt
This article was first published in the Lexis Nexis Australian Intellectual Property Law Bulletin (newsletter) March/April 2015
- This case was decided using the form of s 41 of the Trade Marks Act 1995 (Cth) which applied prior to the amendments introduced by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth). The mark was found to be not registrable as it was not to any extent inherently adapted to distinguish the designated services in classes 35, 38 and 42, and Apple failed to establish that because of the extent to which it had used the mark before the filing date, it did distinguish the designated services as being Apple services.
- The registrability of a mark (including whether it is capable of distinguishing the applicant’s goods and services from the goods or services of others) must be assessed with regard to the scope of the registration which is sought, and in particular, to both:
- the nature of the mark itself (with word marks necessitating a more restrictive approach owing to the breadth of the monopoly they convey to the owner); and
- the specification of the goods or services for which registration is sought (rather than by reference to precisely what goods and/or services the applicant actually does provide).
- Survey evidence is of limited value in that it will usually only serve to show an association between the mark and the applicant, not that use of the mark as a trade mark by the applicant prior to filing date has brought about that association, which is what is required to be established by the applicant, under the former s 41(6).
- If this case had been decided using the current form of the section, the result would have been the same, as the former s 41(6) essentially survives in a redrafted form as s 41(3).
THE LEAD UP TO THIS CASE
The writer mused in an article in an Australian Intellectual Property Law Bulletin back in September 20131 about Apple, and Microsoft, and trade marking store layouts and architecture in general, finishing off with a few remarks about virtual stores.
At that time Apple had just dropped its suit against Amazon in the United States for its use of the term “Appstore”, saying in a statement that “with more than 900,000 apps and 50 billion downloads, customers know where they can purchase their favourite apps”,2 suggesting that the Apple App Store’s success had made the proceedings unnecessary.
Meanwhile, back in Australia, (where Apple also owns the trade mark “APPSTORE”3 ), Apple has been fighting a long, and so far very unrewarding, fight to obtain registration of the word trade mark “APP STORE”.
After filing its application for the mark on 18 July 2008 and receiving an examiner’s decision with which it did not agree, Apple requested a hearing. At the hearing, the registrar’s delegate rejected the application in its entirety based on s 41(6) (as it then was). To add insult to injury the registrar’s decision has effectively been upheld on an appeal to the Federal Court, although it must be pointed out that “although styled an ‘appeal’, this proceeding involves the exercise of the original jurisdiction of the Court”.4
The case was heard at the end of 2013 and Yates, J reserved his decision, handing it down on 3 December 2014.
THE OLD S 41(6) OF TRADE MARKS ACT (CTH)
This section (which appears in a redrafted form as s 41(3) post the Raising the Bar reforms), provides a get out of jail free card to applicants who are able to show that their (or their predecessors in title) extensive use of the mark before the filing date has served to transform a mark which was not to any extent inherently adapted to distinguish the applicant’s goods and services into something which actually does distinguish those goods and services from those of other traders.
It is a very hard nut to crack.
Apple threw everything at it. So, rather unusually, did the registrar, who obtained its own expert evidence and called third party witnesses from King & Wood Mallesons who had previously gathered evidence at the request of their client Microsoft Corporation in the context of its opposition to Apple’s corresponding application for the registration of “APP STORE” as a trade mark in the USA.
THE EVIDENCE LED BY APPLE ON LINGUISTICS
Apple’s lead expert, a professor of linguistics at University College London,5 in evidence which His Honour described as “in large measure, argumentative, rather than factual, in nature”, advanced several propositions, including:
- that Apple’s use of the word “app” in “App Store” had entrenched a narrower meaning of the word “app” than was generally current before the commencement of the App Store, and thus “ushered in a novel meaning” of “store” such that thereafter the expression “app store” cannot be fully understood by simply combining the meanings of its component parts “app” and “store”. His Honour was not persuaded by that evidence, noting (among other things) and discussing examples of the long histories of the word “app” in the context of computer services, and the word “store” in the context of online retailing. Essentially the finding was that “APP STORE” has no more inherent capacity to distinguish than “BOOK STORE” or “ONLINE STORE” would. His Honour did not agree that earlier inconsistent decisions by the trade mark examiner, and the fact that “APPSTORE” is a registered trade mark (having been registered in 2006 by a third party and subsequently acquired by Apple by assignment) supported an argument for registrability of “APP STORE”, and in fact considered that to ponder on whether these prior decisions were right or wrong was an “unwarranted distraction”6 to the case at hand.
- that “it is highly likely that the occurrence of the term app in APP STORE will trigger an association with the term Apple in the minds of members of the public. The association is based on a productive word formation process of clipping that helps establish a close lexical connection between the two terms.”7 His Honour found that argument problematic because it sought to introduce a reference to the Apple trade mark when inherent adaptation is supposed to be directed “solely to the intrinsic qualities of the mark itself, not to features or circumstances that are extraneous to the mark”.8
- That the prepositional use by Apple of the word “on” in the phrase “on the App Store” indicated that “APP STORE” did not have a compositional meaning as at the filing date. This was considered by His Honour to be irrelevant for the same reason as in 2 above, as these indicia are extraneous to the mark itself.
The court also found it problematic that Apple’s lead expert tended to direct his arguments toward his own understanding of how Apple supplies it App Store service and not to the specification of services which Apple had claimed in its application.
Apple also relied on evidence from a Dr James Farrow, an IT consultant who conducted a number of internet searches on the use of the term “app store” by internet users between January 2004 to September 2013.
Dr Farrow’s evidence had a number of deficiencies which had been pointed out by the registrar at the earlier hearing, and his evidence was held not to materially assist Apple even if it suggested a heightened awareness of the App Store service immediately after its launch on 11 July 2008, as that still “says nothing about the inherent adaptation of ‘APP STORE’ to distinguish the designated services in class 35”.9
THE EVIDENCE IN SUPPORT OF FACTUAL DISTINCTIVENESS
Having found that “APP STORE” was not to any extent inherently adapted to distinguish the designated services in class 35 of the application, the court went on to consider whether there was evidence that the mark does actually distinguish the services claimed by virtue of the extent to which the applicant has used the mark before the filing date, for the purposes of s 41(6)(a), which would have allowed the mark to be taken to be capable of distinguishing the services from the services of other traders.
In this regard there were two main difficulties with Apple’s evidence:
- The time period for which the mark had been used by Apple before the filing date was just eight days and the evidence was “opaque” as to how Apple promoted the App Store service in that period. (The court emphasised that it was the filing date that was the relevant date for considering the application of s 41 and, crucially for Apple, not the significantly earlier priority date, due to international filing).
- The evidence led by Apple was essentially in the form of a Newspoll survey which, like Dr Farrow’s evidence, did suggest that many people associate the idea of the App Store service with Apple. However, the Newspoll survey, which was undertaken well after the relevant period, likewise did not provide any evidence that it had been Apple’s use of the mark prior to the filing date that had produced this result, which was essential if the application was to succeed under s 41(6). The survey evidence suffered from the same flaws as in similar trade mark cases.10
THE FAILURE OF THE WHOLE APPLICATION
His Honour framed his finding with reference to the designated services in class 35, and held that this then determined the fate of the application as a whole, as there were no separate applications for registration of the mark for the services claimed in classes 38 or 42.
However His Honour went on to consider the parties submissions on this point and concluded that he was in any event satisfied that the services in classes 38 and 42 were essentially those types of services that a customer would expect to find provided by an “app store” and as such was satisfied that “the mark ‘APP STORE’ is not to any extent inherently adapted to distinguish those services”, and that further “Apple had not established that because of the extent to which it had used ‘APP STORE’ before the filing date, the mark did, at the filing date, distinguish the designated services in classes 38 and 42 as being Apple’s services and not those of other persons”.11
This decision is a strong affirmation of the deficiencies inherent in survey evidence in these cases, and of the difficulties in overcoming a finding of no inherent adaptability to distinguish — the problem with all word marks that are descriptive.
The court strongly defended the action of the registrar in the robust approach it took to the defence of the appeal, including using the witnesses from Microsoft’s lawyers, perhaps paving the way for similar approaches to future cases.
What is not clear is why Apple fought so hard for this registration in light of their phenomenal success with the App Store as mentioned above. Is not having the trade mark “APP STORE” registered in Australia really such a problem for Apple in the sense that it will impact that success? It seems unlikely.
C Logan “Protecting the architecture of happiness using trade marks (with apologies to Alain de Botton)” (2013) 26(3) Australian Intellectual Property Law Bulletin 63.
2 D Levine, Reuters, Judge rejects part of Apple App Store suit vs Amazon, 2 January 2013, available at www.reuters.com.
3 Registration number 1156967
4 Apple Inc. v Registrar of Trade Marks (2014) 109 IPR 187;  FCA 1304; BC201411305 at .
7 Above, n 4, at , quoting from  of Professor Harris’ declaration
10 Optical 88 Ltd v Optical 88 Pty Ltd (No 2) (2010) 275 ALR 526; 89 IPR 457;  FCA 1380; BC201009532, Chocolaterie Guylian NV v Registrar of Trade Marks (2009) 180 FCR 60; 258 ALR 545;  FCA 891; BC200907428, Societe Des Produits Nestle SA v Unilever plc  RPC 35 and Woolworths Ltd v BP plc (No 2) (2006) 154 FCR 97; 235 ALR 698;  FCAFC 132; BC200606912 were all cited in the judgement, and held to be applicable to this case despite the fact that the latter three cases concerned the capacity of shape and colour marks to distinguish, as opposed to word marks.
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