Wednesday, February 25, 2015

The APP STORE TM in Australia : Expert evidence as argument and the utility of survey evidence in trade mark registrations

Apple tried to file a trademark registration for the name APP STORE in Australia back in 2008.

The company has famously been using the term for the digital distribution marketplace exclusive to their devices/operating systems, and tried to get the name registered under Classes 35 (Advertising; business management; business administration; office functions), 38 (Telecommunications.), and 42(Design and development of computer hardware and software.).

The application was initially accepted for registration, but IP Australia submitted a late objection for the Class 35 registration, citing that the mark is not distinctive enough to fall within the scope of section 41(5) of the unamended Trade Marks Act 1995 (Act).

Essentially, while the term app store (a store for Apps) could apply to Apple’s digital marketplace, the term could also apply to other similar services such as Google’s Google Play Store.

Apple wasn’t happy with the decision. It filed an appeal, providing testimonials from a number of witnesses that consist of Apple employees and a professor of linguistics (Harris), along with survey evidence from the director of a market and social research company (Newspoll survey).

Apple argued:

1. remarkably, that the use of the word “Store” is unique in the sense that the services are being provided without the use of any physical location. This is remarkable because online retail sales are commonplace in contemporary commerce and “e-stores” and “e-shops” abound on the internet.

2. unsurprisingly, the term “App” refers to the diminutive form of “Applications,” but also has a strong linguistic connection to the company’s name, Apple, in effect triggering an association in the minds of consumers between the company’s services and the term.

3. a Newspoll survey evidenced that 79 percent of a survey population of 1223 people were aware of the term App Store and, further that 64 percent of the subset associated the term with a particular company. 88 percent of those people associated the term with Apple or one of their devices.

Additionally, Apple also noted that the Examiner at IP Australia failed to raise an objection against the initial application, and that their previous application for the term APPSTORE was accepted without any objections over its distinctiveness.

Justice Yates of Australia’s Federal Court upheld the December decision, dismissing the testimonial from the linguistics professor as being 'in large measure, argumentative, rather than factual'.

The judgment reads:

“Professor Harris drew attention to the fact that, when making the declaration, he had in mind English as spoken in the United Kingdom and elsewhere in Europe. For the purpose of this proceeding, he reconsidered the declaration having regard to the fact that it would be used in an Australian context. He said that the fact that the declaration would be relied on for use in an Australian context did not cause him to change the opinions expressed in it…. Professor Harris also argued that “app” has a strong linguistic connection with the name “Apple”. He explained: 27.Once a clipped form becomes established in a speaker’s mental lexicon as an independent word in its own right, it will be stored at a lexical location that is close to its related full form. This reflects the fact that the two main criteria speakers use to organise their mental lexicons are based on the phonological and semantic properties of words. The semantic content of a clipped form will usually overlap with that of the full version from which it is derived. For example, the meaning of a nickname is typically a combination of the meaning of its related full form plus some component of familiarity. Phonologically, the shortened form is closely connected to its full form ...”

There is always a small temptation in prosecuting trade marks to turn to linguistic experts to explain how a mark is not part of the lexicon of language but is unnatural and distinctive. If the etymology of a word is a commercial one, then having a professor of linguistics affirm that would, you think, help. Having an independent expert back you up should overwhelm any resistance to registration.

Instead, Justice Yates robustly tackles the expert’s opinion:

“Professor Harris’ argument in his declaration was that when “app” is used with specific reference to “Apple”, it falls into the same semantic field of digital technology as “app” with its software meaning of “application”: see [100]-[101] above. Thus, in Professor Harris’ analysis, the use of “app” with specific reference to “Apple” is the semantic criterion that leads to “app”, “application” and “Apple” falling within what he described as “the range of phonologically and semantically defined lexical cohort”. It is on this basis that Professor Harris expressed the view that individuals are likely to perceive a strong association between “app”, “application” and “Apple”.

…The difficulty with this argument is the semantic criterion which Professor Harris applied to “narrow” the lexical neighbourhood, namely the use of “app” with specific reference to “Apple” itself. It is, perhaps, a matter of little surprise that, in such circumstances, one might well argue that individuals are likely to see an association between “app” and “Apple”. But, if that association is made, it is because of the involvement, in the formation of perceptions, of an indicium (the specific reference to “Apple”) that is extraneous to the mark itself. Thus, the association for which Professor Harris argued is critically dependent on the particular circumstances of use. This is an important matter to be borne in mind when considering whether and to what extent a mark is inherently adapted to distinguish at the time when application for its registration is made. This is because, in trade mark law, inherent adaptation is directed solely to the intrinsic qualities of the mark itself, not to features or circumstances that are extraneous to the mark.”

When a judge says that an expert makes an “argument”, then you know that the judge thinks the expert is not assisting the court, but instead is making a partisan argument. Justice Yates went on to say:

“I turn, finally in this regard, to Professor Harris’ argument concerning the prepositional use of “on” in the phrase “on the App Store ” as indicating that APP STORE did not have a compositional meaning at the filing date…. Neither the preposition “on” nor the phrase “on the App Store ” – nor, indeed, the device element to which Professor Harris made specific reference – is the mark or part of the mark for which application is sought, namely APP STORE simpliciter. Thus, the argument concerning the prepositional use of “on” in the device to which Professor Harris referred can be put to one side. It is founded on indicia which are extraneous to the mark itself.”

More “arguments” from the expert. In a negligence case, Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305, Heydon JA set out six points which needs to be taken into account in adducing useful and unassailable expert evidence. It is not easy:

“In short, if evidence tendered as expert opinion evidence is to be admissible, it must be agreed or demonstrated that there is a field of "specialised knowledge"; there must be an identified aspect of that field in which the witness demonstrates that by reason of specified training, study or experience, the witness has become an expert; the opinion proffered must be "wholly or substantially based on the witness's expert knowledge"; so far as the opinion is based on facts "observed" by the expert, they must be identified and admissibly proved by the expert, and so far as the opinion is based on "assumed" or "accepted" facts, they must be identified and proved in some other way; it must be established that the facts on which the opinion is based form a proper foundation for it; and the opinion of an expert requires demonstration or examination of the scientific or other intellectual basis of the conclusions reached: that is, the expert's evidence must explain how the field of "specialised knowledge" in which the witness is expert by reason of "training, study or experience", and on which the opinion is "wholly or substantially based", applies to the facts assumed or observed so as to produce the opinion propounded. If all these matters are not made explicit, it is not possible to be sure whether the opinion is based wholly or substantially on the expert's specialised knowledge. If the court cannot be sure of that, the evidence is strictly speaking not admissible, and, so far as it is admissible, of diminished weight. And an attempt to make the basis of the opinion explicit may reveal that it is not based on specialised expert knowledge, but, to use Gleeson CJ's characterisation of the evidence in HG v R [1999] HCA 2; (1999) 197 CLR 414, on "a combination of speculation, inference, personal and second-hand views as to the credibility of the complainant, and a process of reasoning which went well beyond the field of expertise" (at [41]).”

The expert’s opinion here seemed to not apply “to the facts assumed or observed so as to produce the opinion propounded”.

Justice Yates also noted that the term was not being “new or otherwise special use” of the term, even noting that Apple’s own press releases did not use the term in a novel or unique manner. Finally, the judge dismissed the argument that the word “store” was being used in a new, novel manner, as Apple’s Class 35 services could “include retail services provided through a physical location or store.”

The judge also pointed out that in many of the instances where the term APP STORE is attributed to being a part of Apple or its associated products and services, the term is accompanied by one or more trade marks that is owned by the company, such as Apple or iPad, or iTunes, and that the service can only be accessed by customers through websites and devices that are owned by Apple themselves. Thus, the term APP STORE is only made distinctive by the applicant’s primary or top level identifying marks or branded service, and is not distinguishable enough on its own when compared to other similar services. The judge also dismissed the newspoll survey, citing that the sample size was too small, and not sufficient to overcome the general meaning inherent in the words APP STORE.

This was not surprising either. Of 39 cases before the Registrar of Trade Marks in which survey evidence was used, only six were found to be helpful, and 33 were found by the Registrar to be unhelpful. Notwithstanding this, parties seem not to be deterred at all in using surveys. The following table suggests the trend of use of surveys as evidence in trade mark hearings might actually be increasing.

Year of Decision Decisions with Surveys Used in Evidence
1999 2
2000 3
2001 3
2002 2
2003 1
2004 2
2005 2
2006 2
2007 1
2008 4
2009 3
2010 2
2011 3
2012 0
2013 4
2014 4

Expert evidence is not easy, and neither is it cheap. Parties should be very careful to assess the utility of such evidence before spending large sums on material which gets them nowhere.

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