Apple Denied App Store Trade Mark in Australia

It has been a bumper week for IP decisions in Australia. Earlier, we reported on the Coke v Pepsi and Cantarella decisions. Now, in a third major judgment, the Federal Court of Australia (Federal Court) has refused registration of Apple’s trade mark application for APP STORE in Australia.

Apple Inc. v Registrar of Trade Marks [2014] FCA 1304 was an appeal from a decision by the Registrar of Trade Marks (Registrar). The Registrar found that the trade mark APP STORE was ‘purely’, ‘directly’ or ‘inherently’ descriptive, as it would be well understood by modern digital-savvy consumers to refer to a ‘store’ that sells or provides ‘apps’.

Registration was refused under section 41(6) of the Trade Marks Act 1995 (Cth) (as it then was). Under this section, marks which are not to any extent inherently adapted to distinguish the applicant’s goods or services must be rejected for registration unless the mark had acquired distinctiveness by reason of extensive use by the applicant before the filing date.

In the Federal Court appeal, Apple argued that APP STORE was inherently adapted to distinguish its services as at the filing date, 18 July 2008 and should be registered. In support of this argument, Apple relied on expert evidence from a linguistics professor to the effect that, as at July 2008, APP STORE could only be understood non-compositionally, that is, as two separate terms, the meanings of each of which had since changed. The expert argued that prior to the launch of Apple’s service, use of the term ‘app’ was largely restricted to experts in the computing field to refer to software generally. The term app has since come to mean something more specific, namely downloadable software tailored to specific tasks and designed to be used on a handheld device.

This evidence was rejected by Justice Yates, who upheld the Registrar’s finding that APP STORE was purely descriptive.

This decision is important a number of respects.

1. It reaffirms that trade marks that are considered purely descriptive are extremely difficult to register, even for one of the world’s best known companies. 
2. Although securing registration of a descriptive trade mark can be tremendously powerful, choosing such a mark can also backfire if the term becomes too generic too quickly. In this respect, Apple might be considered a victim of its own overwhelming commercial success.

The Federal Court also confirmed that acquired distinctiveness is to be determined by reference to the filing dateand not the priority date. This was a critical distinction for Apple. The Australian application claimed priority from 7 March 2008 based on an application filed in Trinidad and Tobago, but the Apple App Store was not launched until 11 July 2008, around seven days before the Australian filing date. Even so, Justice Yates found that Apple’s use of the trade mark within that seven day period was insufficient to justify registration under section 41(6). An interesting question would be whether Apple would be able to achieve registration of the APP STORE trade mark if it refiled the application today.

Finally, this case was unusual in that the Registrar filed its own evidence, including expert evidence. Apple was critical of the role played by the Registrar suggesting that it was ‘overly active’ and partisan. Justice Yates strongly defended the Registrar’s position, leaving the door open for interested third parties to assist the Registrar to play a more active role in such hearings in future.