Vogel Internet, Information Technology and e-Discovery Blog : Texas Internet, Information Technology, eCommerce & E-Discovery Lawyer & Attorney Peter S. Vogel : Gardere Wynne Sewell Law Firm : Dallas TX

Apple did not prove that App Store was famous and not descriptive, therefore Apple failed to establish a likelihood of success at trial. On July 6, 2011 US District Judge Phyllis Hamilton denied Apple’s request to enjoin Amazon from using “App Store” as she ruled that it was unlikely that there would be any confusion between customers of Apple and Amazon.

Actually the standard to obtain a temporary injunction is so high they are rarely granted. 

Apple needed to prove that it had irreparable harm, money damages would not suffice, and it would ultimately win at trial. Which meant that at the trial Apple would have to prove “trademark infringement, Apple must show ownership of a legally protectable mark and a likelihood of confusion arising from Amazon’s use.” Amazon’s defense was that App Store is a generic mark “because Apple’s App Store is simply an online store where consumers can search for, choose, and download apps.” 

Apple reported it 10 billion apps had been downloaded since Apple started the app business.  However the truly amazing statistic is that Apple announced six months later that another 5 billion apps have been downloaded, for a total of 15 billion apps!  We can all watch to see if Judge Hamilton’s ruling has an impact on the future for Apple and the app world!
 

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After devoting my February column in eCommerceTimes to Internet sales tax issues there was an interesting turn of events over the dispute between Amazon.com and the Texas Comptroller over a $269 million Internet sales tax bill. Amazon.com announced it was shutting down its Texas operations on April 12, 2011. In January Amazon.com filed a lawsuit against the Texas Comptroller to get the Internet sales tax audit which was the basis of the Texas Comptroller’s a $269 million Internet sales tax, but the Texas Comptroller claims the Internet sales tax audit cannot be released because of attorney client privilege. Texas Governor Perry announced that the Texas Comptroller was wrong and running off Amazon.com was bad for business in Texas. When the US Congress created the ban on Internet sales taxes back in 1998 (Internet Tax Freedom Act) the main purpose was to encourage the growth to the Internet, and now that it’s clear that the eCommerce is here to stay. Although collecting Internet sales taxes sounds great to help states find new revenue sources, it’s actually you and I who will be paying the Internet sales taxes. So it seems to me allowing more Internet sales taxes will not help consumers at all.

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Amazon filed a lawsuit in Texas state court as part of its challenge of a $269 million claim for uncollected Internet sales taxes dating back to 2005 when Amazon opened operations in Texas. In September 2010 the Texas Comptroller of Public Accounts demanded the $269 million of Internet sales taxes, but refused to provide Amazon with the audit claiming that the audit was protected by attorney client privilege since the audit was prepared by an attorney. In December 2010 the Texas Attorney General agreed with the Comptroller’s claim of attorney client privilege leaving Amazon little choice but to file suit. It makes little sense to me why any company should not be able to see a sales tax audit whether the claim is $100 or $269 million, but the claim of attorney client privilege seems wrong since tax payers should be able to see tax audits. This will be an interesting case to watch as this appears to be a misuse of the attorney privilege. What do you think?

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No surprise that dozens of filings were made in opposition to the proposed settlement of the lawsuit between the Google and the Authors Guild and Association of American Publishers which was filed in “2005 by the authors and publishers against Google over its plan to digitize millions of books from libraries without authorization from rights holders.” Although Google has received the support of Sony, civil rights groups, and antitrust experts, there were notable opponents to the settlement including “individuals, rival companies like Amazon and Microsoft, advocacy organizations, groups representing authors and publishers and even some foreign governments.”

EU Opposition of Google’s Settlement

Many voices in the EU complained at a hearing that the proposed settlement would give Google more power to exclusive rights to sell million of out-of-print works even though the copyrights are still valid. Not much of a surprise that Microsoft is backing the anti-Google settlement groups in the EU. Many groups in the EU feel that since they did not participate in the settlement that they were discriminated against.

What’s Next in the Lawsuit?

Federal District Judge Denny Chin must now sort through the filings to try to determine if the proposed settlement properly protects the authors, or else the case may continue on to trial. Among other issues for Judge Chin to consider are antitrust concerns that Google’s control over these works would give Google too much market power. There are many antitrust issues on the horizon for Google it seems with many opponents, not just with books but more broadly in the entire space known as eCommerce. Stay tuned as we see Google and eCommerce evolve.
 

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When Amazon remotely deleted George Orwell’s 1984 from the Kindle reading devices last week I’m sure that George Orwell rolled over in his grave. Orwell’s novel written in 1949 predicted that Big Brother’s censors would erase anything that the government found objectionable by sending down a “memory hole.” I’m happy to report that my paperback copy that I read in junior high school is still on my library shelf!

What Happened? 

When Amazon discovered that its source of the Orwell’s 1984 and Animal Farm did not have the rights to the books, Amazon remotely deleted copies from the Kindles. This got some headlines and irritated many, but since Amazon did not have the right to distribute the books it did the next best thing, it deleted copies. 

 Where Are We Going With This? 

The Free Software Foundation is soliciting support from many sources (including librarians, publishers and major authors and public intellectuals) to present a petition to Amazon asking that Amazon reconsider its use of software called digital rights management (DRM). DRM is software that restricts the use of copies and devices so for instance the version of 1984 that Amazon distributed could only be viewed on a Kindle and Amazon could delete copies. This runs against the grain of the Copyright Act’s "first sale doctrine" that permits a purchaser of a copyrighted book to sell that copy, but not make other copies. Many individuals are concerned about users of copyrighted materials are losing their rights guaranteed under the Copyright Act. It also seems that George Orwell’s predictions may have come true, not necessarily in 1984, but in 2009.
 

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