Apple and have ended their lawsuit over use of the phrase “App Store” in marketing the companies’ competing interfaces for selling smartphone applications.  On Tuesday, the U.S. District Court for the Northern District of California dismissed the case based on an agreement between the companies that will allow both to continue using the term.

The case began more than two years ago when, in March 2011, Amazon launched the Amazon Appstore for Android.  Apple brought suit that same month, claiming that it had coined and popularized App Store as the name of the unique mobile software download service they had developed for the iPhone, iPod, and iPad.  Amazon’s use of the phrase, Apple argued, was likely to cause confusion among consumers, infringed Apple’s trademark, and was false advertising.  (A copy of Amazon’s complaint can be found here.)

Amazon responded that “app store” is a generic term commonly used among businesses competing in the market and is thus ineligible for trademark protection.  It filed a counterclaim asking for the court’s permission to continue using Appstore.

Last January, the district judge dismissed Apple’s false advertising claim, finding that Apple had no evidence of Amazon making any express or implied false statements in marketing the Amazon Appstore.  Nor, she concluded, had Apple shown that any customers were misled by Amazon’s use of the phrase.  Shortly after this ruling, the parties began court-ordered settlement negotiations.

Then, on June 28, Apple granted Amazon a covenant not to sue.  Under the Supreme Court’s decision earlier this year in Already, LLC v. Nike, Inc., this put an end to the controversy.  Because Apple could not reasonably be expected to resume its attempts to enforce the “App Store” trademark against Amazon, Amazon no longer needed a court order declaring that it was allowed to keep using the name.  This paved the way for the district court’s eventual dismissal of the suit, just a few weeks shy of the mid-August trial date.

While the case between Apple and Amazon is now over, Apple’s application to register the “App Store” trademark with the U.S. Patent and Trademark Office is still pending.  Microsoft has opposed registration of the mark, arguing, like Amazon, that it is generic.  This matter, which has been suspended pending the outcome of Apple’s suit against Amazon, can now resume.  It remains to be seen whether Apple will pursue its trademark application and, if it does, whether the “App Store” mark will be allowed to register in spite of Apple’s acquiescence to Amazon’s continued use of the term.