According to Reuters,
) has lost a part of its lawsuit against
) as a U.S. District Judge, Phyllis Hamilton, ruled against
Apple's false advertising allegations.
The lawsuit dates back to 2011, when Apple had accused Amazon
of using the words "App Store" for its mobile software download
service, stating that Amazon violated the trademark law,
potentially confusing developers and consumers. In Amazon's
defense, the online retail giant had said that it uses the word
"Appstore" without a space in between and also uses a lower case
"s", not the way Apple uses it. Apple had filed for the trademark
right to use the term App Store from the US Patent and Trademark
office following the roll out of its 3G-enabled iPhone on July
The lawsuit to decide Apple's remaining claims against Amazon
is scheduled to go on trial in August. The current defeat is a
real dampener for the iPad maker, as Apple and Amazon are direct
competitors in the digital downloading space.
Along the same lines, Apple was recently dealt a major blow as
its request to ban Samsung's smartphones in the U.S. was turned
down by U.S. District Judge Lucy H. Koh. This was a major defeat
for Apple against Samsung in the U.S. after the U.S. Court of
Appeals for the Federal Circuit had overturned a lower court's
ban on sales of Samsung's Galaxy Nexus smartphones in the country
in October 2012.
We believe that the impending lawsuits will act as a headwind
for Apple. Additionally, increasing product-related costs and
supply-chain constraints are the other near-term headwinds.
Moreover, Apple continues to face increasing competition from
) Android-based products.
Nonetheless, Apple's solid product line, Apps, iCloud, loyal
customer base and a strong balance sheet are the long-term
drivers. Strong sales of iPhone and iPad will drive near-term
The company's expansion in China and other developing nations
should act as a positive catalyst going forward. Moreover, the
recent shareholder-friendly moves, such as dividend payment and
share buyback, are expected to drive the stock going forward.
Currently, Apple has a Zacks #3 Rank (Hold).
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