Apple Inc. v. Amazon.Com, Inc.

Filing 52

ORDER by Judge Hamilton denying 18 Motion for Preliminary Injunction (pjhlc1, COURT STAFF) (Filed on 7/6/2011)

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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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APPLE, INC.,
Plaintiff,

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v.

ORDER DENYING MOTION FOR
PRELIMINARY INJUNCTION

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For the Northern District of California

United States District Court

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No. C 11-1327 PJH

AMAZON.COM INC., et al.,

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Defendants.
_______________________________/

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The motion of plaintiff Apple, Inc. (“Apple”) for a preliminary injunction came on for

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hearing before this court on June 22, 2011. Plaintiff appeared by its counsel David

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Eberhart, and defendants Amazon.com, Inc. and Amazon Digital Services, Inc. (“Amazon”)

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appeared by their counsel Martin Glick, Sarah Givan, and Clara Shin. Having read the

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parties’ papers and carefully considered their arguments and the relevant legal authority,

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the court hereby DENIES the motion.
BACKGROUND

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This is a trademark infringement case. Since July 2008, Apple has sold applications

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for its mobile devices through its App Store service. On July 17, 2008, Apple filed

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Application No. 77/525,433 to register the mark “App Store” with the U.S. Patent and

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Trademark Office (“PTO”).

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On January 5, 2010, the PTO filed a Notice of Publication, stating that the mark had

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been published in the Trademark Official Gazette, and that any party who believed it would

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be damaged by the registration of the mark could file a notice of opposition with the

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Trademark Trials and Appeals Board (“TTAB”). After requesting and receiving an

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extension on the filing deadline, Microsoft Corporation (“Microsoft”) filed an opposition to

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the registration (Opposition No. 91195582) asserting that the “App Store” mark cannot be

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registered because it is generic.
In September 2010, Amazon began soliciting software developers to participate in a

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future mobile software download service to be offered by Amazon. Apple allegedly became

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aware of this action in early January 2011, when Amazon launched the developer portal, in

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connection with the “Amazon Appstore Developer Program.”
Apple subsequently demanded that Amazon cease its use of the “App Store” mark.

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Apple claims that Amazon provided no substantive response to those communications until
after it had launched the Amazon Appstore for Android, which launch occurred on March

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For the Northern District of California

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22, 2011 (after the filing of the original complaint in this action, but before the filing of the

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first amended complaint).
According to Apple, Amazon’s Appstore service (available on the amazon.com

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website) offers nearly 4,000 mobile software applications, which can be downloaded onto

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Android mobile devices. Many of these applications are the same titles as some of the

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most popular applications available from Apple’s App Store service.

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In the first amended complaint, Apple asserts five causes of action – (1) trademark

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infringement, false designation of origin, and false description, under Lanham Act § 43(a),

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15 U.S.C. § 1125(a); (2) dilution, under Lanham Act § 43(c), 15 U.S.C. § 1125(c);

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(3) trademark infringement, under common law; (4) dilution, under California Business &

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Professions Code § 14330 and common law; and (5) unfair competition, under California

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Business & Professions Code § 17200.
On January 10, 2011, Microsoft filed a motion for summary judgment in the TTAB

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opposition proceeding. The TTAB suspended the proceeding pending resolution of

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Microsoft’s motion. Microsoft’s motion was fully briefed as of March 29, 2011. On April 6,

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2011, Apple submitted a request for oral argument on Microsoft’s motion.
Apple now seeks an order preliminarily enjoining Amazon from using the “App Store”

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mark.
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DISCUSSION

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A.

Legal Standard

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A plaintiff seeking a preliminary injunction must establish that it is likely to succeed

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on the merits, that it is likely to suffer irreparable harm in the absence of preliminary relief,

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that the balance of equities tips in its favor, and that an injunction is in the public interest.

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Winter v. Natural Resources Defense Council, Inc., 129 S.Ct. 365, 374 (2008).

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Alternatively, the plaintiff may demonstrate that serious questions going to the merits

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were raised and that the balance of hardships tips sharply in the plaintiff's favor, “so long

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as the plaintiff also shows that there is a likelihood of irreparable injury and that the
injunction is in the public interest.” Alliance for Wild Rockies v. Cottrell, 632 F.3d 1127,

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For the Northern District of California

United States District Court

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2011 WL 208360 at *7 (9th Cir., Jan. 25, 2011). A “serious question” is one on which the

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plaintiff has “a fair chance of success on the merits.” Sierra On-Line, Inc. v. Phoenix

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Software, Inc., 739 F.2d 1415, 1421 (9th Cir. 1984).

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An injunction is a matter of equitable discretion” and is “an extraordinary remedy that

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may only be awarded upon a clear showing that the plaintiff is entitled to such relief.”

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Winter, 129 S.Ct. at 376, 381.

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B.

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Apple’s Motion
Apple contends that it is likely to prevail on the merits of its claims of infringement

and dilution.

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1.

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To prove trademark infringement, Apple must show ownership of a legally

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protectable mark and a likelihood of confusion arising from Amazon’s use. Applied Info.

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Scis. Corp. v. eBay, Inc., 511 F.3d 966, 969 (9th Cir. 2007). Apple contends that it amply

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makes these showings.

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Infringement claim

Apple asserts that it meets the first prong of the infringement test because the “App

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Store” mark is legally protectable. Marks are normally classified as either generic,

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descriptive, suggestive, arbitrary, or fanciful. Two Pesos, Inc. v. Taco Cabana, Inc., 505

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U.S. 763, 768 (1992). Suggestive, arbitrary, and fanciful marks are inherently distinctive
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and thereby automatically are entitled to federal trademark protection because “their

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intrinsic nature serves to identify a particular source of a product.” Id.

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A descriptive mark is not automatically entitled to trademark protection, but may

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become protectable if the mark has acquired distinctiveness through secondary meaning.

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Zobmondo Entmt., LLC v. Falls Media, LLC, 602 F.3d 1108, 1113 (9th Cir. 2010). Generic

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marks are not eligible for trademark protection. Id.

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Apple contends that the “App Store” mark is suggestive, and is inherently distinctive.

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A suggestive mark is one for which “a consumer must use imagination or any type of

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multistage reasoning to understand the mark’s significance.” That is, “the mark does not
describe the product’s features, but suggests them.” Id. at 1114. The primary criterion for

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For the Northern District of California

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evaluating whether a mark is suggestive is whether it “requires a mental leap from the mark

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to the product.” Fortune Dynamic, Inc. v. Victoria’s Secret Stores Brand Mgmt., Inc., 618

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F.3d 1025, 1033 (9th Cir. 2010).

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Apple argues that the “App Store” mark is suggestive because its meaning is not

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inherently obvious, and claims that it has devoted substantial resources educating

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consumers about the service. Apple asserts further that even if the “App Store” mark can

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be considered descriptive, rather than suggestive, it is protectable because it has acquired

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secondary meaning.

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In assessing secondary meaning, courts consider a variety of factors, including

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(1) whether actual consumers of the service bearing the claimed trademark associate the

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trademark with the producer; (2) the amount, nature, and geographical scope of advertising

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under the claimed trademark; (3) the length and manner of its use; and (4) whether its use

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has been exclusive. See Japan Telecom, Inc. v. Japan Telecom Am., Inc., 287 F.3d 866,

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873 (9th Cir. 2002). Apple argues that under Sierra On-Line v. Phoenix Software, Inc., 739

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F.2d 1415, 1422-23 (9th Cir. 1984), it need show only that there is a fair chance that it can

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prove secondary meaning to obtain a preliminary injunction.

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Here, Apple contends, the testimony of its expert Robert Leonard Ph.D., establishes
that customers associate the “App Store” mark with Apple’s mobile software download
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service. In his analysis, Dr. Leonard reviewed sources from LEXIS/NEXIS to determine the

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usage of “App Store” in news stories. Apple also argues that its massive advertising of its

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App Store and its use of the “App Store” mark support a finding of secondary meaning, as

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the advertising has “entrenched the mark in consumers’ minds as being associated only

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with Apple.” Finally, Apple asserts that it has been the substantially exclusive user of the

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“App Store” mark in connection with a mobile software download service since March 2008.

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Apple again cites to Dr. Leonard’s declaration, to show that the term “app store” was not in

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general use in connection with the distribution of software prior to Apple’s introduction of its

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App Store service.
Apple asserts further that the “App Store” mark is not generic. Generic marks are

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For the Northern District of California

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marks that “refe[r] to the genus of which the particular product is a species.” Two Pesos,

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Inc., 505 U.S. at 768 (quotation omitted); see also Filipino Yellow Pages, Inc. v. Asian

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Journal Publ'ns, Inc., 198 F.3d 1143, 1147 (9th Cir. 1999). A mark is generic if it “primarily

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denotes a product, not the product's producer.” Anti-Monopoly, Inc. v. Gen. Mills Fun

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Group, 611 F.2d 296, 301 (9th Cir. 1979). Put another way, generic terms are common

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names that a substantial majority of the relevant public understand primarily as describing

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the genus of goods or services at issue. In re Dial-a-Mattress Operating Corp., 240 F.3d

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1341, 1344 (Fed. Cir. 2001).

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To determine whether a term is generic, the court looks to “whether consumers

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understand the word to refer only to a particular producer’s goods or whether the customer

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understands the word to refer to the goods themselves.” Yellow Cab Co. of Sacramento v.

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Yellow Cab of Elk Grove, Inc., 419 F.3d 925, 929 (9th Cir. 2005). Courts refer to this as the

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“who-are-you/ what-are-you” test. Id. “A mark answers the buyer's questions ‘Who are

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you?’ ‘Where do you come from?’ ‘Who vouches for you?’ But the generic name of the

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product answers the question ‘What are you?’” Id. (quotation omitted).

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Here, Apple argues, there is ample evidence that App Store is not primarily

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understood to mean the genus of services. Moreover, Apple asserts, its principal

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competitors have all found terms other than “App Store” to describe their services within the
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relevant genus.
Nor, Apple argues, may Amazon “dissect” the term “App Store” into App + Store,

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examining each component of the term. Apple asserts that the mark must be examined as

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a whole to determine whether it is generic. In addition, Apple contends the fact that no

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traditional dictionary uses the term “app store” provides further proof that the term is not

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generic.

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Apple contends that it also meets the second prong of the infringement test,

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because it can show that Amazon’s use of the “App Store” mark is likely to confuse

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consumers. The question whether customers are likely to be confused about the source or
sponsorship of products or services has been described as “[t]he core element of

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For the Northern District of California

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trademark infringement.” Reno Air Racing Ass'n., Inc. v. McCord, 452 F.3d 1126, 1135

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(9th Cir. 2006).

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In the Ninth Circuit, an eight-factor test guides the assessment of whether a

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“likelihood of confusion” exists. Those factors are (1) the strength of the mark; (2) the

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proximity or relatedness of the goods; (3) the similarity of the marks; (4) evidence of actual

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confusion; (5) the marketing channels used; (6) the degree of care customers are likely to

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exercise in purchasing the goods; (7) the defendant's intent in selecting the mark; and (8)

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the likelihood of expansion into other markets. AMF Inc. v. Sleekcraft Boats, 599 F.2d 341,

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348-49 (9th Cir. 1979); see also Reno Air, 452 F.3d at 1135-36 & n.9.

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Apple argues that because the services at issue are marketed and delivered via the

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Internet, three of the Sleekcraft factors (the second, third, and fifth) take precedence over

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the others, under the analysis set forth in Interstellar Starship Servs., Ltd. v. Epix, Inc., 304

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F.3d 936, 942 (9th Cir. 2002). Here, Apple argues, the parties’ services are related, as

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both companies offer downloadable mobile software to consumers – in many cases, the

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same software titles – and that unsophisticated consumers are likely to be confused

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regarding the availability and source of software.

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Apple contends that the term “Amazon Appstore for Android” is virtually identical to
Apple’s “App Store” mark, and since Amazon is known as a re-seller of other companies’
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products, consumers may erroneously conclude that Amazon has been authorized to offer

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software available through Apple’s App Store service.

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And, Apple argues, the two companies use the same marketing channel – the

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Internet – and because Apple has authorized Amazon to sell other Apple products on

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Amazon’s website, consumers are likely to be confused when they also see that Amazon is

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offering a mobile download service using Apple’s mark.

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Apple contends that the remaining factors also support a finding of likelihood of

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confusion. With regard to the first factor – strength of the mark – Apple contends that its

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“App Store” mark is strong. Two relevant measurements of strength are “conceptual
strength” and “commercial strength.” Network Automation, Inc. v. Advanced Sys.

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For the Northern District of California

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Concepts, Inc., 638 F.3d 1137, 1149 (9th Cir. 2011). Conceptual strength involves

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classification of a mark along the spectrum from generic to fanciful. Id. (citing Brookfield

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Comm’cns, Inc. v. West Coast Entm’t Corp., 174 F.3d 1036, 1058 (9th Cir. 1999)). “A

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mark's conceptual strength depends largely on the obviousness of its connection to the

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good or service to which it refers.” Fortune Dynamic, 618 F.3d at 1032-33. Commercial

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strength is based on “actual marketplace recognition,” and thus “advertising expenditures

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can transform a suggestive mark into a strong mark.” Network Automation, 638 F.3d at

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1149 (citing Brookfield, 174 F.3d at 1058).

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Apple concedes that suggestive and descriptive marks are not conceptually the

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strongest, but asserts that the commercial strength of its mark is substantial, based on the

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hundreds of millions of dollars it has spent on print, television, and Internet advertising, and

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the fact that this advertising has created a significant public association between the mark

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and Apple as the source of the service.

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With regard to the fourth factor – evidence of actual confusion – Apple asserts that

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since Amazon only recently started using the term “Appstore,” it is not feasible to provide

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evidence of actual confusion, and the fact that there is no such evidence is not significant.

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With regard to the sixth factor – the degree of care customers are likely to use in

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purchasing the goods – Apple argues that customers do not exercise significant care in
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purchasing the actual software apps, as consumers are generally not likely to exercise

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significant care when navigating the Internet, and are also unlikely to exercise care when

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downloading free or inexpensive apps. Apple asserts further that because Amazon is

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attempting to attract customers on the basis of ease of service, its service may appeal to

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technologically less savvy consumers.

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With regard to the seventh factor – Amazon’s intent in selecting the mark – Apple

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asserts that Amazon’s actual knowledge of the alleged infringement and its disregard of

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Apple’s rights, as evidenced by Amazon’s failure to respond to the cease-and-desist letters,

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and its continued use of the term “Appstore,” can be construed as evidencing an intent to

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infringe.
With regard to the eighth factor – the likelihood of expansion into other markets –

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Apple argues that Amazon’s potential for expanded use of the mark is strong, as shown by

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the fact that Amazon is already competing directly with Apple’s mobile software download

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service. Apple concedes that Amazon’s downloads will not work on Apple devices, but

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asserts that the two companies are still competing for customers who are considering what

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kind of software downloads might be available before they purchase the mobile device.

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Apple also argues that it is possible that Amazon might expand from offering downloads for

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the Android-type devices, into other “ecosystems,” which could potentially include devices

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based on Apple’s operating system.

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In opposition, Amazon contends that Apple has failed to demonstrate that it is likely

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to succeed on the merits of the infringement claim. Amazon makes two main arguments –

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that the “App Store” mark is generic (and therefore not protectable), and that even if the

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mark is not generic, Apple cannot demonstrate any likelihood of confusion.

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Amazon contends that the “App Store” mark is generic, because Apple’s App Store

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is simply an online store where consumers can search for, choose, and download apps. In

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support of this argument, Amazon points to dictionary definitions of “app,” and “store,” and

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“app store;” Apple’s generic use of “app” and “app store;” the generic use of “app store” by

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the media, industry press, and competitors; and the generic use of “app store” by
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consumers. Amazon also asserts that no amount of secondary meaning can make a

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generic mark protectable. Amazon recognizes that there is no dispute that Apple was an

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early entrant into the app business, but argues that Apple cannot block competitors from

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using a generic name just because it was the first to popularize it.

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In its second main argument, Amazon asserts that even if “app store” is not generic,

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Apple cannot demonstrate any likelihood of confusion, let alone the clear showing required

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for preliminary injunctive relief. “The test for likelihood of confusion is whether a reasonably

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prudent consumer in the marketplace is likely to be confused as to the origin of the good or

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service bearing [the mark].” Dreamwerks Prod. Group, Inc. v. SKG Studio, 142 F.3d 1127,
1129 (9th Cir. 1998). Amazon notes that only owners of Android devices will be able to

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purchase apps at Amazon’s App Store for Android, and that no one who has an Apple

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device will be able to purchase an Apple app at the Amazon App Store. Thus, Amazon

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contends, customers at both stores understand that there is no overlap of goods.

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In addition, Amazon argues that the Sleekcraft factors support a finding of no

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likelihood of confusion, and it also rejects Apple’s argument that the court should place

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greater emphasis on the “trinity” of factors (similarity of marks, relatedness of goods, and

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similarity of marketing channels) that may in some cases be more relevant, because they

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are not necessarily more relevant here.

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With regard to the first factor – the strength of the mark – Amazon argues that “App

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Store” is weak because it is generic. With regard to Apple’s argument that its “App Store”

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mark is commercially strong, Amazon notes that the Ninth Circuit indicated in Network

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Automation that the evidence-intensive inquiry necessary to determine commercial strength

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is not appropriate at the preliminary injunction stage. See id., 638 F.3d at 1150.

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With regard to the second factor – the relatedness of the goods – Amazon argues

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that it is highly unlikely that customers will mistakenly assume that there is an association

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between Apple’s App Store and Amazon’s Appstore for Android. Amazon contends that

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even were the products and services virtually interchangeable – which they are not, since

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Apple sells or makes available apps for its Apple devices, and Amazon sells or makes
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available apps for the Android – this factor would need to be considered in conjunction with

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labeling and appearance of the advertisements and the degree of care exercised by

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consumers.

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With regard to the third factor – the similarity of the marks – Amazon argues that

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they are not similar, because it is clear from the parties’ respective websites that Amazon’s

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apps are to be used on Android smartphones, while Apple’s apps are to be used on Apple

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mobile devices. Thus, Amazon asserts, the prominent use of the well-known “housemarks”

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(Amazon/Android and Apple) significantly reduces or eliminates the likelihood that

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customers will be confused as to the source of the parties’ products.

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With regard to the fourth factor – evidence of actual confusion – Amazon argues that
there is none, and that this factor has no effect on this case at this point.
With regard to the fifth factor – the marketing channels used – Amazon argues that it

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is irrelevant that the parties’ products are offered via a common marketing channel – the

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Internet – because, as the Ninth Circuit explained in Network Automation, it would be a rare

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commercial retailer that did not advertise online today, and “the shared use of a ubiquitous

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marketing channel does no shed much light on the likelihood of customer confusion.” Id. at

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1150. Nevertheless, Amazon adds, a salient factor is that the apps compatible with Apple’s

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devices can be purchased only at Apple’s App Store.

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With regard to the sixth factor – the degree of care customers are likely to exercise

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in purchasing the goods – Amazon contends that smartphone customers are aware that

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there is no overlap in goods. Amazon argues that the customers for these apps are not as

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technologically naive as Apple is attempting to argue – since they paid significant amounts

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of money for their devices, they are likely to be discriminating and sophisticated shoppers.

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With regard to the seventh factor – Amazon’s intent in selecting the mark – Amazon

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argues that there is no evidence that Amazon intended to mislead customers. Amazon

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asserts that the mere knowledge of Apple’s mark is not sufficient to show bad faith,

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especially where a defendant, like Amazon, believes the mark to be generic and lacking in

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confusion.
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With regard to the eighth factor – the likelihood of expansion into other markets –

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Amazon asserts that there is no likelihood of expansion, since Amazon cannot expand into

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sales of apps for Apple devices without Apple’s permission. Thus, Amazon argues, this

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factor is irrelevant.

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The court finds that Apple has not established likelihood of success as to the

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infringement claims. The court assumes without deciding that the “App Store” mark is

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protectable as a descriptive mark that has arguably acquired secondary meaning. The

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court does not agree with Amazon that the mark is purely generic, for the reasons argued

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by Apple, but also does not find that Apple has shown that the mark is suggestive, as there
appears to be no need for a leap of imagination to understand what the term means.

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However, the court finds that Apple has not established a likelihood of confusion.

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The Ninth Circuit has made clear that the eight Sleekcraft factors are not exclusive, and

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that some factors may be more significant than others, depending on the context. See,

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e.g., Network Automation, 638 F.3d at 1149.

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Here, the first Sleekcraft factor – strength of the mark – favors Amazon, as Apple

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has not established that “App Store” is a strong mark. Apple concedes that the mark is not

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conceptually strong. Commercial strength, which generally is ascertained via an “evidence-

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intensive inquiry,” is based on “actual marketplace recognition.” Network Automation, 638

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F.3d at 1149-50. While “advertising expenditures” may transform a suggestive mark into a

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strong mark, id. at 1149, Apple has not made a sufficient showing that the “App Store” mark

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is a suggestive mark.

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The second factor – relatedness of the goods – slightly favors Apple, since both

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companies are offering downloads of software applications for mobile devices. However,

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the proximity of goods is measured by whether the products are complimentary, sold to the

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same class of purchasers, and similar in use and function. Id. at 1150. Thus, while the

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apps might be similar in use and function, the apps offered by Amazon can be used on

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Android devices only, not on Apple devices, which suggests that the class of purchasers is

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not the same in each instance.
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The third factor – similarity of the marks – also favors Apple, since the marks are

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essentially identical in sight, sound, and meaning. See id. On the other hand, Amazon’s

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website makes clear that the apps it offers are to be used with Android devices only.

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The fourth factor – evidence of actual confusion – is neutral, since neither party has

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provided admissible evidence or considered this factor (which, in any event, is considered

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to be of diminished importance at the preliminary injunction stage. See id. at 1151.)

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The fifth factor – marketing channel used – favors Amazon if one considers the

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marketing channel to be the Amazon.com website (as opposed to the Apple iTunes

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website), or possibly favors Apple if one considers the marketing channel to be the Internet

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(where almost anything today can be bought or sold).
The sixth factor – degree of care customers are likely to use in purchasing the goods

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– appears to favor neither side, since the parties’ arguments are for the most part

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speculation concerning the relative “sophistication” of consumers and whether

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sophistication can be measured by (or is related to) the amount of money spent.

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The seventh factor – Amazon’s intent in selecting the mark – does not clearly favor

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Apple, since Amazon’s position is that it believed the mark to be generic and therefore not

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protectable, and Apple has not shown otherwise.

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The eighth factor – likelihood of expansion into other markets – is similarly

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unsupported by any evidence. It seems clear that Amazon would like to expand into other

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markets, by, for example, offering apps and other products for devices other than Android,

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but it seems equally clear that Amazon will not be able offer apps for Apple devices unless

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Apple licenses Amazon to do so.

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Thus, two of the eight factors somewhat favor Apple, and three factors somewhat

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favor Amazon. The remaining three factors are neutral, or do not clearly favor either side.

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Accordingly, under this analysis, the court finds that Apple has not established that it is

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likely to prevail on the “confusion” element of its infringement claim.

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2.

Dilution claim

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Apple argues that it is also likely to prevail on the merits of its dilution claim. Under
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the federal dilution statute, as amended in 2006, Apple is entitled to injunctive relief if it can

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establish (1) that its “App Store” mark is famous; (2) that Amazon is making commercial

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use of the mark; (3) that Amazon’s use of the mark began after the “App Store” name

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became famous; and (4) that Amazon’s use presents a likelihood of dilution of the

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distinctive value of the mark. PerfumeBay.com v. eBay, Inc., 506 F.3d 1165, 1180 (9th Cir.

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2007); 15 U.S.C. § 1125(c); see also Nike, Inc. v. Nikepal Int’l, Inc., 2007 WL 2782030, at

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*5 (E.D. Cal., Sept. 18, 2007).

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Apple asserts, first, that its mark is famous. “A mark is famous if it is widely
recognized by the general consuming public of the United States as a designation of
source of the goods or services of the mark’s owner.” 15 U.S.C. § 1125(c)(2)(A). Factors

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to be considered in determining whether a mark is famous include (1) the duration, extent,

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and geographic reach of advertising and publicity of the mark, whether advertised or

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publicized by the owner or third parties; (2) the amount, volume, and geographic extent of

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sales of goods or services offered under the mark; (3) the extent of actual recognition of the

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mark; and (4) whether the mark is registered. Id.. Courts have found marks to be famous

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under the amended federal dilution statute due to national brand prominence, the degree of

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consumer recognition of the marks, significant advertising and brand promotion, and overall

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product sales. See Nike, 2007 WL 2782030, at *5-6; see also adidas America, Inc. v.

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Payless Shoesource, Inc., 529 F. Supp. 2d 1215, 1244-45 (D. Or. 2007).

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Here, citing the testimony of its Director of the App Store service, Apple asserts that

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it has used the “App Store” mark for over three years, the mark has been exposed to the

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owners of more than 160 million Apple mobile devices worldwide, and consumers have

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downloaded software applications more than 10 billion times; that the mark has been the

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subject of extensive advertising across the United States with hundreds of millions of

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dollars spent on advertising; that the mark has garnered significant Web presence and

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unsolicited third-party publications discussing the brand; that the mark has a robust

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presence throughout the United States and abroad; and that the mark has been registered

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by Apple in more than 50 countries.
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Apple contends further that Amazon is making commercial use of the mark, by

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designating its mobile download service by the name “Appstore,” and by marketing and

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selling mobile software downloads through that service in the United States; and that

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Amazon’s use of the “App Store” mark began long after Apple had made the mark famous

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and had spent millions of dollars promoting and advertising it, and had provided tens of

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millions of mobile devices with software applications.

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Finally, Apple argues that Amazon’s use of Appstore will dilute Apple’s mark, either

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because the similarity between the two will blur the distinctiveness of Apple’s mark, or

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because Amazon’s use may tarnish Apple’s mark.
Under the amended federal statute, dilution by blurring arises from association of the

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For the Northern District of California

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“similarity between a mark or trade name and a famous mark that impairs the

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distinctiveness of the famous mark.” 15 U.S.C. § 1125(c)(2)(B). Dilution occurs “when a

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mark previously associated with one product also becomes associated with a second.”

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Visa Int’l Serv. Ass’n v. JSL Corp., 610 F.3d 1088, 1090 (9th Cir. 2010).

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The statute identifies six factors relevant to the question of blurring – (1) similarity of

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the marks; (2) distinctiveness of the famous mark; (3) substantially exclusive use;

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(4) degree of recognition; (5) intent to create association; and (6) actual association

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between the marks. 15 U.S.C. § 1125(c)(2)(B). Apple contends that five of the factors

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weigh in its favor, and that the last factor is neutral.

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Apple asserts that the marks are virtually identical, that its mark has acquired

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distinctiveness (as “app store” was not in common usage before it developed the App

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Store), that its use has been substantially exclusive, that its mark enjoys widespread

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recognition, and that Amazon is attempting to create association with Apple’s mark. With

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regard to actual association, Apple contends that it would be premature to require Apple to

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make this showing, because Amazon’s service was launched only three months ago.

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Apple also contends that Amazon’s use of the “App Store” mark will tarnish it.

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Dilution by tarnishment occurs when an “association arising from the similarity between a

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mark or trade name and a famous mark . . . harms the reputation of the famous mark.” 15
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U.S.C.A. § 1125(c)(2)(C). Apple argues that it has expended substantial effort to offer a

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service that is easy to use and provides high-quality, safe software that will preserve the

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integrity and stability of its customers’ mobile devices.
Based on the testimony of its Director of App Store Services, Apple claims that the

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goodwill arising from its efforts is associated with its “App Store” mark, and that it

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developed this reputation in part by screening software made available through the App

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Store service, in order to ensure that the service does not include inappropriate content,

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viruses, or malware. Apple asserts that software compatible with the Android-based mobile

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devices has been subjected to highly-publicized viruses and malicious code, which has
created device instability and data securing issues. Thus, Apple argues, because Amazon

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is enabling software to be downloaded through its Appstore service that bypasses security

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safeguards, and can potentially damage its customers’ devices, Amazon’s use of the “App

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Store” mark will tend to “whittle away” the value of Apple’s mark.
In opposition, Amazon argues that Apple cannot demonstrate any likelihood of

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dilution, let alone the clear showing required for preliminary relief. Amazon makes three

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arguments – that “App Store” is not a famous mark, that the statutory “blurring” factors

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weigh in Amazon’s favor, and that tarnishment is inapplicable in this case.
To meet the “famousness” element of protection under the dilution statutes, “a mark

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[must] be truly prominent and renowned.” Avery Dimension Corp. v. Sumpton, 189 F.3d

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868, 875 (9th Cir. 1999). This requires a showing greater than “distinctiveness” so as not

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to “upset the balance in favor of over-protecting trademarks, at the expense of potential

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non-infringing uses.” Id. For example, Amazon notes, “Fruit of the Loom” is famous, but

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“underwear” is not; and “Barnes & Noble” and “Amazon” are famous, but “bookstore” is not.

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Similarly, Amazon asserts, “Apple,” “iPod,” “iPad,” and “iTunes” are famous, but “AppStore”

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is not.

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Amazon contends that Apple does not presently own a registration, that it did not

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coin the mark in question, and that even Apple has been known to refer to its “App Store”

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as an “applications store” and an “electronic store.” Amazon notes in addition that Apple
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has provided no survey or expert opinion regarding the actual recognition of its mark.

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Amazon asserts that “App Store” is not famous, as it is not a registered, arbitrary mark, but

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rather is an as-yet unregistered generic mark, and is a common term that many people and

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companies use.

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Amazon contends that Apple has failed to show any likelihood of dilution by blurring

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or by tarnishment. Amazon argues that the first two “blurring” factors – similarity of the

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marks and distinctiveness of the marks – are irrelevant, since the “App Store” mark is

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generic.

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With regard to the third factor – substantially exclusive use – Amazon argues that
many retailers use “app store” to refer to their stores, and there are thousands of active

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registered domain names that use the term “app store.”

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With regard to the fourth factor – degree of recognition – Amazon contends that

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Apple has presented no survey or expert opinion to support its claim that the mark “App

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Store” has widespread recognition as being associated with Apple, and instead relies on a

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linguistic analysis of “app store.”

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With regard to the fifth factor – intent to create association – Amazon argues that

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Apple provides no support for its claim that Amazon intended to create an association with

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Apple when it started using “App Store.”

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With regard to the sixth factor – actual association between the marks – Amazon

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notes that Apple has conceded that it has no evidence of actual association between

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Apple’s App Store and Amazon Appstore for Android, relying instead on two semi-

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anonymous posts from bloggers. However, Amazon argues, this type of “evidence” is

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inherently unreliable, as it is not authenticated and the source is not identified. See Sony

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Computer Entm’t, Inc. v. Connectix Corp., 203 F.3d 596, 609 (9th Cir. 2000).

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Amazon also asserts that there is no likelihood of dilution by tarnishment, because

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Apple has provided no evidence that Amazon has used the “App Store” mark “in a

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degrading or disparaging context.” “Tarnishment generally arises when the plaintiff’s

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trademark is linked to products of shoddy quality,” which diminishes the value of the mark
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because the public will associate the low quality with the plaintiff’s unrelated goods. Id.

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(citation and quotation omitted). Amazon contends that Apple has provided no evidence

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that the “App Store” mark has been used in a degrading or disparaging context, or that

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there is anything inferior about Google’s competing Android operating system.

argument that “App Store” is famous (which Amazon denies), Amazon’s use of this term in

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“Amazon Appstore for Android” constitutes fair use and is not actionable. Amazon notes

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that under 15 U.S.C. § 1125(c)(3)(A), where a defendant uses a term for its common

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meaning, there can be no liability. Amazon asserts that it does not use “App Store” as a

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trademark, but simply to tell the customer whose service it is, what the service is (an app

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For the Northern District of California

In a final argument, Amazon argues that even if one assumes for the sake of

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United States District Court

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store), and what types of apps are offered (apps for Android).

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The court finds that Apple has not established a likelihood of success on its dilution

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claim. First, Apple has not established that its “App Store” mark is famous, in the sense of

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being “prominent” and “renowned.” The evidence does show that Apple has spent a great

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deal of money on advertising and publicity, and has sold/provided/furnished a large number

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of apps from its AppStore, and the evidence also reflects actual recognition of the “App

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Store” mark. However, there is also evidence that the term “app store” is used by other

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companies as a descriptive term for a place to obtain software applications for mobile

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devices.

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With regard to the statutory “blurring” factors, the marks are similar, but “App Store”

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is more descriptive than it is distinctive. Apple did have substantially exclusive use of “App

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Store” when it launched its service a little over three years ago, but the term appears to

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have been used more widely by other companies as time has passed. The mark does

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appear to enjoy widespread recognition, but it is not clear from the evidence whether it is

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recognition as a trademark or recognition as a descriptive term. Moreover, there is no

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evidence that Amazon intended to create an association between its Android apps and

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Apple’s apps, and there is no evidence of actual association.

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With regard to tarnishment, there is no evidence to support a likelihood of success
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on this part of the claim. Apple speculates that Amazon’s App Store will allow inappropriate

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content, viruses, or malware to enter the market, but it is not clear how that

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will harm Apple’s reputation, since Amazon does not offer apps for Apple devices.

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CONCLUSION
In accordance with the foregoing, the motion for preliminary injunction is DENIED.

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IT IS SO ORDERED.

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Dated: July 6, 2011
______________________________
PHYLLIS J. HAMILTON
United States District Judge

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