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What’s in a Name? More Legal Fees Than You Can Shake a Stick At.

What’s in a Name? More Legal Fees Than You Can Shake a Stick At.

The dispute between Amazon and Apple over use of the app store nomenclature has been dropped in the courts. Find out how to shield your IT business from massively expensive IP cases.

Friday, January 10, 2014/Categories: errors-and-omissions-insurance

App developers, smartphone users, and techies of all sorts, rejoice: the Apple-vs.-Amazon showdown over who can use the name "App Store" (or "Appstore") has ended. The winner? No one - or everyone, depending on your point of view.

Here's a look at how this intellectual property drama has played out since Apple first brought the issue to court in 2011 and what the decision could mean for owners of small IT firms.

False Advertising Claims: Mercifully Covered by General Liability Insurance

In 2008, Apple unveiled its App Store, where users of Apple's mobile devices could download what our quaint forebears called "applications" but what today are known simply as apps. Since then, users of Apple products have been restricted to those apps offered in the App Store (unless, of course, they resort to jailbreaking their devices, which allows access to a larger, less-regulated app market).

In 2011, Amazon began selling apps via its Amazon Appstore for Android (the space-free spelling of which, no doubt, would have appealed to modernist author James Joyce, who stirred public outcry when the phrase "scrotumtightening sea" appeared in his 1922 masterpiece Ulysses).

Apple almost immediately took legal action against Amazon, claiming the online sales giant was engaging in false advertising and trademark infringement by ripping off the name. That legal action included…

  • The initiation of a lawsuit, which doubtless required paying lawyers gobs of money to craft an intellectual property case against Amazon.
  • Back-and-forth filings between the two companies, which again involved paying hefty sums to lawyers.
  • An eventual request to dismiss the case this week, which was granted by the judge overseeing the case.

The mobile app market has changed since 2008, and it's possible that Apple finally agreed that the term "App Store" (or "Appstore") is, as Amazon's lawyers alleged, generic and therefore not protected under intellectual property laws. Whatever the reasons behind the decision, however, Apple moved to have the case dismissed from court, and the judge complied.

What Happens When Independent IT Contractors Face IP Claims from Mega-Corporations?

If you think this scuffle between giants is out of the realm of possible occurrences for your business, it's time to think again. Even independent IT consultants and contractors could find themselves slapped with an IP lawsuit, especially if they do work for larger clients.

So how can you protect your business revenue from the overwhelming cost of constructing a legal defense for an IP claim? Make sure you have the following insurance policies in place and up-to-date:

  • General Liability Insurance: This type of coverage typically includes protection for advertising injury claims, including misuse of other companies' trademarked advertising materials. Check with your agent, though, to make sure your GLI policy includes the necessary coverages.
  • Errors & Omissions Insurance: This coverage can fill the gaps that a GLI policy leaves, particularly if the advertising or copyright matter in question falls into a legal gray area, as many do in tech industries. Most E&O policies work on a claims-made basis, meaning they only offer protection if they're in force at the time an incident occurs and when a claim is filed.

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