July 6, 2011: Amazon wins a landmark verdict against Apple over its proprietary use of the term “App Store” — opening up the possibility of other rival services calling their own app stores by the phrase Apple had helped popularize.
The case highlights just how central the concept of downloadable apps had become to the mobile experience, only three years after Apple launched its iOS App Store.
Apple first opened the digital doors of its App Store in July 2008, around a year after the first iPhone was launched. Interestingly, Steve Jobs had initially been opposed to the idea because he believed it would water down the purity of the iPhone experience and open up the device to vulnerabilities.
Fortunately he changed his mind, which turned out to be great news for both Apple and developers. Not only did the proliferation of apps open up new use-cases for the iPhone that had never existed previously, but it also became a nifty source of revenue for Apple, which took a 30 percent cut of every app sale.
By July 2011, there were more than 500,000 apps in the App Store, with more than 15 billion downloads between them. In 2011, this meant that Apple made $6 billion from content/app sales: more than the entire corporation had made from all its revenue streams combined in 2003.
Seeing that providing an app store was a great way of driving user loyalty, other companies like Google and Amazon began exploring the idea for themselves. Amazon wanted to call its version the Amazon Appstore for Android. However, it quickly found itself on the receiving end of a legal letter from Apple’s lawyers who pointed out that the term “App Store” had been granted as a trademark to Apple in early 2010.
Apple followed this up with a lawsuit, claiming that Amazon’s Appstore was not only stepping on Apple trademarks, but also diluting and tarnishing its brand.
Amazon countered by arguing that the term “app store” was overly generic, and that it was not confusable with Apple’s version. Ultimately, U.S. District Phyllis Hamilton agreed with Amazon, and said that Apple had shown no evidence that Apple had been hurt as a result of the rival app store.
The lawsuit paved the way for other companies to adopt the term “app store” as a shorthand for any online store that allows customers to purchase software applications.