Channeling in action, though not as explicit doctrine: the
court rejects an attempt to make a trademark case into a false advertising
case. Apple sued Amazon over Amazon’s use of “Appstore” for apps for Android
and Kindle Fire devices. Apple alleged
trademark infringement, federal and California dilution, false advertising
under the Lanham Act, and unfair competition.
Amazon sought and received summary judgment on the Lanham Act false
advertising claim.
Apple’s false advertising argument was that Amazon’s use of
“App Store” misrepresented the nature, characteristics and qualities of
Amazon’s service since consumers would expect the high quality of Apple’s App
Store and get an inferior service.
Amazon argued that Apple hadn’t identified any false statement of fact
about the nature, characteristics, or quality of its Appstore, and that its
claim was nothing more than garden-variety trademark infringement.
Apple conceded that it hadn’t identified any explicitly
false statement, but argued that actionable falsity may be implied. It relied on three cases and a citation from
McCarthy (all quotes are the Apple court’s,
not the original source’s):
(1) TrafficSchool.com, Inc. v. Edriver Inc., 653 F.3d 820 (9th
Cir. 2011), found false advertising based on implicit claims of government
endorsement/official status by DMV.org.
The name of the site mimicked an official site, as did the site
design. But here there was no evidence
that Amazon was mimicking Apple’s site or advertising, and the plaintiffs in TrafficSchool.com had evidence of
consumer confusion from surveys, emails from confused public officials, etc.
(2) Eastern Air Lines, Inc. v. New York Air Lines, Inc., 559
F.Supp. 1270 (S.D.N.Y. 1983), involved Eastern’s well-established “shuttle”
service. When NY started a new service
on the same route, it also called it a “shuttle,” suggesting in its ads that it
offered the same features (guaranteed seating, no need for reservations, and
frequent service) as Eastern Air Lines’ “shuttle” service. The court found that “shuttle” was generic,
but upheld the false advertising claim, reasoning that “as used by Eastern, the
term ‘shuttle’ had come to denote certain characteristics, and a competitor
could not use the term to mislead customers into believing that it provided the
same type of service that the public had come to expect from Eastern Airlines’
‘shuttle.’ … New York Air Lines’ ads were misleading, because they purported to
compare the two shuttle services and indicated that the features and amenities
were comparable.”
(3) Potato Chip Inst. v. General Mills, Inc., 333 F.Supp.
173 (D. Neb. 1971), involved a lawsuit against General Mills for selling a product
called “potato chips” that contained rice flour and dehydrated potatoes. The court concluded that “potato chip” could
in theory describe chips made in this way, but that the term was, “in the
experience of consumers, so associated with slices of raw potatoes cooked in
oil until crisp that using it to describe chips made from dehydrated potatoes
would tend to mislead the public and therefore constitute false
advertising.” It relied on consumer
surveys and dictionary definitions.
(4) Finally, the McCarthy treatise says, as part of its
discussion of how to avoid genericity by using a generic descriptor to
accompany another term that can serve as a trademark, that “a company that
introduces a new product that does not establish trademark rights may have a
false advertising claim against a junior user who uses a generic term to
falsely imply that it is selling the same generic product or service identified
by that term as does the established company.”
Apple argued that its cause of action was the same as in the
above cases/authority, since Amazon’s service didn’t possess the
characteristics and qualities that consumers had come to expect from an APP
STORE, based on their familiarity with Apple’s services.
The court disagreed, finding these authorities “not
noticeably relevant to the question whether it has provided evidence in this
case sufficient to support the first element of the false advertising claim”
(falsity). In particular, “[t]he mere
use of “Appstore” by Amazon to designate a site for viewing and
downloading/purchasing apps cannot be construed as a representation that the
nature, characteristics, or quality of the Amazon Appstore is the same as that
of the Apple APP STORE.” It’s true that
implicit falsity is governed by the Lanham Act, but Apple provided no evidence,
either through market research or consumer surveys, of exactly what false
message was conveyed. “Apple has
presented no evidence that consumers or customers understand ‘app store’ to
include specific qualities or characteristics or attributes of the Apple APP
STORE, or that any customers were misled by Amazon’s use of the term.” Apple argued that its store was better, with
more apps and better device integration, but there was no evidence that
consumers would expect Amazon’s store to be identical
to Apple’s, especially since Apple’s store sold apps just for Apple devices,
while Amazon’s sold apps solely for Android and Kindle devices.
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