The case began in 2011 after Black Tower Press, a publisher of sci-fi and fantasy titles, filed a trademark suit in response to Apple’s announcement that it would use the word “iBooks” to describe software that allows users to purchase online books. Here’s a look at the two marks:

Black Tower came into possession of the “ibooks” mark in 2006 by purchasing the assets of another publishing company that had used the word for an imprint that sold millions of sci-fi and horror books in the early 2000′s. Neither Black Tower nor its predecessor, however, obtained a registered trademark for the word.

Apple, on the other hand, did obtain registered trademark rights. It first obtained a license to use “iBook” from another software company in 1999 to describe a line of colorful computers; in 2010, Apple bought the other company’s trademark entirely.

In a detailed decision, U.S. District Judge Denise Cote explained that the word “ibooks” was simply descriptive of books sold on the internet, and that Black Tower had not acquired any distinctive meaning in the word — only in the word and lightbulb logo used together.

Cote also wrote that she was granting summary judgment to Apple for a second reason: that no consumers would be confused by the two companies’ products:

The move was foreshadowed earlier this year. Both The Nikkei in Japan and AllThingsD reported in early January that Apple had signed distribution deals with three big Japanese publishers.

In a press release sent out on Tuesday evening Eastern time, Apple notes that the Japanese iBookstore features “titles from major and independent publishers, including a great selection of books from Kodansha, KADOKAWA, Bungeishunju, Gakken and Gentosha. The iBookstore has a wide selection of emerging and established authors including Shyotaro Ikenami, Jiro Akagawa, Atsuko Asano and Ryu Murakami.”

The Japanese iBookstore is also offering enhanced ebooks and “digitally exclusive titles including Ryu Murakami’s fiction novels ‘At the Airport,’ ‘Exodus of Middle-School Students’ and ‘I’ll Always Be With You, Always’  which has interactive emails in each chapter to bring you even deeper into the story.”

The update notes for 3.1 say, “The iBookstore in Japan now has hundreds of thousands of books available for purchase, including fiction, manga, light novels and more.” In addition, the update says there are reading improvements for “a number of Asian languages,” though the specific languages are not specified.

The iBooks update is out now and can be downloaded via the App Store.

This post was updated at 8:17 p.m. ET on Tuesday, March 5 with additional details from Apple’s press release about the iBookstore’s launch.

Apple had previously launched Breakout Books sections in Australia, New Zealand, Canada and the U.K. The section focuses primarily on genre fiction, with sections for romance, sci-fi/fantasy, and mystery/thriller.

While Apple mentions “hand-picking,” the books in the section primarily seem to be chosen based on how well they are selling. In a very long blog post about the benefits of self-publishing, Mark Coker, the founder of self-publishing company Smashwords, notes that 54 of the 64 titles in the Breakout Books section were distributed by Smashwords. He’d previously noted that Apple is now the largest retailer for Smashwords authors. (Smashwords does not distribute books to Kindle.)

Borrowing ebooks with OverDrive

Most libraries are choosing a third party to host and manage the lending process.  One such service provider, OverDrive Digital Downloads, is what my local library uses. OverDrive currently supports 18,000 libraries with millions of readers. The experience is not quite what you would expect if you’re used to Apple’s integrated iBooks app or Amazon’s Kindle bookstore. But it does work, and once you have the ebook on your iPhone or iPad, the reading experience is just about the same.

Getting Started: The first thing you will need is an active account at your local library.  This will be used to identify you as a borrower and ultimately limit the number of ebooks you can have checked out at any one time.

Selecting an e-reader: For most of the titles available from my local library on OverDrive, I have only two main choices:  to either use Amazon’s Kindle solution on my iPhone, iPad and Mac, or to use OverDrive’s own e-reader client for the iPhone, iPad and Mac.  As a possible third option, you can also elect to use Adobe Digital Editions for the Mac.  But be aware: the one client that you will not be able to use is Apple’s own iBook e-reader for iOS, as it does not support the DRM solution that the other readers support.

Borrowing an ebook: Browsing the online library of ebooks is the same experience for all e-eaders.  You will select a book via your browser.  I found that using Safari for OS X and iOS work just fine for this.  Once you associate your library account with OverDrive, you can create wish lists and place holds on books you want to read.  Each title in the library is limited to a predetermined number of copies that the library can lend out.

Downloading the ebook: If you place a hold on a book, you will be notified via email when the book is available.  Depending on your e-reader, once you log in to your library account, you will either download the file directly to the OverDrive e-reader client on your device, or you will log on and register your library account with Amazon, and check the book out directly to your Amazon account.

Since I already have all of my devices registered with my Amazon Kindle account, as soon as I checked out the ebook it was available on all of my devices for me to read.  So reading any ebook that I check out from the library is the same experience on my Kindle as with any other book in my library.  Even my bookmarks sync across all of my devices.

Digital magazines with Zinio

The experience with magazines is different since my library chose to go with Zinio as its partner.  Zinio has been around for a while and was bringing digital versions of popular magazines to your iPhone and iPad long before Apple introduced iOS Newsstand to the world.  There are no choices here, you have to use the Zinio reader for the iPhone, iPad and Mac.

You do have to sync your Zinio account with your library account, but once that is done, as soon as you select a magazine from the online library of digital magazines available for lending, it instantly shows up on your Zinio account for reading.  While you won’t have the same connivence as you would with a receiving updates via a paid subscription, selecting individual releases can be more cost effective since borrowing is of course free.

Borrowing audiobooks

I was also happy to see that you can use OverDrive to check out audiobooks from the library as well.  To do this, you will have to use the OverDrive client for Mac, which does come with some restrictions: You will not be able to borrow any audiobook that in only available in WMV format.  You will be limited to borrowing only MP3 audiobooks.

You will be able to listen to your audiobooks in your favorite audio device as the OverDrive client for Mac supports exporting audiobooks to devices like an iPhone, iPad and iPod.  You are even permitted to use the OverDrive client to burn an audiobook to CD.

Overall the experience was a positive one.  It takes a little to get used to the process of searching for electronic books and magazines that will work with the format your e-reader supports, and ultimately to get them working on your preferred devices.  But after you have done it a couple of times, it’s really not all that complicated.  And it can definitely help expand your reading list and your own personal digital library without costing you anything.

The timing of the launch is unclear. While The Nikkei says it could happen as early as this month, AllThingsD cites sources who say that’s “far too optimistic.”

Japan has been slow to embrace ebooks, with manga dominating the ebook market and publishers reluctant to digitize books in fear of cannibalization of print sales. (Publishing Perspectives has a lot of good coverage of the ebook transition in Japan.) But the arrival of other Western ebook retailers in the country should grease the wheels for Apple, and since the iPad’s market share in Japan is estimated around 60 percent, that should also help adoption of the platform.

Scrolling view

You can access the new scrolling view by tapping on the “aA” icon in the upper-right corner, choosing Themes, and then tapping on Scroll. Now, instead of tapping on the screen edges to turn the page, you can just scroll up to keep reading. If you use Instapaper at all, it works just like reading in that app.

The chief problem I have with this view is it felt like I was reading a run-on page. Maybe I’m old-fashioned, but my eyes and brain are used to the brief rest that comes with turning the page. Simply put, I did feel myself freaking out a bit when the page went on way longer than I expected. My initial experience was so displeasing that after vowing to give it a solid chance, I just gave up. There are location numbers in the left-hand margin so you can get a vague sense of when page numbers change, but I would like it better if there was also a thin horizontal rule to mark the location changes.

I don’t think the new view is completely useless, though. An ideal use would be reference texts where you need to view a section of text than spans over two pages. For general reading, however, I still find the tap-to-turn method the best. Also, while Apple has said it’s tweaked iOS to detect accidental thumb pressed with the iPad mini, the scrolling text view could be a guaranteed way to make sure you don’t suddenly jump ahead 20 pages.

Purchased Collection

I don’t buy a lot of books via iBooks — Amazon, for the time being, is still my chosen purveyor of reading materials — but recently I needed to look at a book I’d bought through the iBookstore previously. To read it, I needed to go the iBookstore, choose Purchased, and then redownload it from there. It felt like a few steps too many.

I know, I know. I suffered.

One thing Amazon’s Kindle app has done better than iBooks is how it handles books in the cloud. You just click on the Cloud tab and you view a library on non-downloaded books. Now, iBooks works the same way. Go to your Collections list, choose Purchased, and boom, your Books in the Cloud are there.

Unfortunately, one area Amazon still eats Apple’s lunch is how it handles sideloaded content. You can upload damn near anything to your Personal Documents section on Amazon and download it to your various Kindle apps. Apple only supports this feature for books you buy through the iBookstore. If you sideload a lot of content to iBooks (guilty) you still need to use iTunes to sync it to your iOS devices.

Now, that’s suffering.

Sharing passages

Every now and then, I tweet a book I’m reading (or just finished reading). Maybe it’s the bibliophile’s version of sharing what I ate for lunch. How I’d expect a sharing feature to work in a books app is to tweet, Facebook, or whatever, a book I’m reading, some general thoughts, and a shortened link to the book in the retailer’s store.

That’s not how it works in iBooks.

Instead, you highlight a passage, tap Share, and that passage along with your commentary are shared. I rubbed my temples at the various types of passages that may be shared with me on Twitter and Facebook since I have friend with odd tastes in reading.

As with the scrolling text, I’m going to say this feature is the most relevant to people reading texts that need to share passages with others via email. When I was in school, I’d need to share parts of scientific texts with group mates. Schools, book clubs, religious study groups, etc. could find this handy for sharing amongst themselves.

Afterward

I’d put a side bet with myself that we’d see an iBooks update on Tuesday. What with the rumor mill and all, I felt it was easy money. It’s a good thing there wasn’t a point spread, though.

Because while testing these new features out, my thoughts kept tracking along the lines of: this is a full version release? It felt like it should have been called iBooks 2.5; not iBooks 3. Maybe there’s more coming in future dot releases, especially once iTunes 11 is released.

Overall, the iBookstore contains 1.5 million books that have been downloaded 400 million times so far, Apple CEO Tim Cook said. The main changes to iBooks — which isn’t updated in the iTunes Store as of this writing, but will be today — are a continuous scrolling option for ebooks (so you can just flick instead of turning virtual pages — a feature readers may or may not care about) and better integration with iCloud so that ebooks sync across devices. You can tap to share a passage on Facebook or Twitter. The company also added support for Korean, Chinese and Japanese, bringing the total number of languages supported to over 40, according to Cook.

In addition, Apple’s self-publishing platform iBooks Author, which lets users create graphics-rich ebooks (like textbooks) for iPad, is being updated. It gets new templates, the option to create portrait-only (as opposed to landscape) books and other customization options.

Once Hiptype’s plugin is added to an ebook, it provides insights like reader demographics, reading behavior (where people start or stop reading; what they skip), conversion patterns (who buys an ebook after reading a free sample); and sharing and highlighting behavior (which passages readers highlight or take notes on). Publishers then log into their Hiptype accounts to see a dashboard with visualizations of the data. Hiptype also helps publishers run Facebook campaigns and target readers with personalized recommendations.

Hiptype launches in beta this week and is working with a limited number of publishers, whom 26-year-old founder and CEO James Levy (cofounder is 19-year-old Sohail Prasad) would not name — though a sample book profile for 50 Shades of Grey suggests Random House might be one early client. Other publishers — as well as self-published authors — can request access on Hiptype’s website and will be invited to join in waves. The first book is free. After that, Hiptype will charge $19 per month per book for a basic package (including data from up to 1,000 readers and basic insights and trends) or $99 per month per book for a pro package (including data from up to 500,000 readers, detailed insights and trends, ad management and personalized backlist recommendations for readers).

One possible concern is privacy. “We don’t want to discourage the conversation about privacy,” Levy said, noting that while all of the data Hiptype collects is anonymous, users can opt out completely. The company is also looking for ways it can improve its service for readers. In beta, end users have requested that Hiptype make its data available to them. For example, Levy said, a teacher could track how students are interacting with the books they’ve been assigned to read.

It doesn’t work everywhere yet

Hiptype’s largest limitation is that it doesn’t work on every platform. The plugin only works on platforms that support HTML5 and allow Javascript to be embedded within a book. Apple, which supports EPUB3 and HTML5, is in. But e-ink devices, like Kindle and Nook e-readers, web-based readers like Kindle Cloud, and desktop e-reading platforms are out.

Apple is estimated to have about 10 percent of the ebook market, with Kindle at 55 to 60 percent and Nook around 25 percent. In the case of Kindle and Nook, we don’t know how much of their usage comes from devices versus mobile apps, but for now Hiptype is missing a large portion of the ebook market.

Levy says Hiptype works on most iOS and Android e-reading apps, but wouldn’t clarify what those are beyond “some of the most popular e-reader apps on the most popular operating systems.” He says Hiptype is in discussions with ebook retailers and it’s “paramount to our success that we have an open line of communication.”

When publishers do see the data on their books, “it can be a little bit depressing,” Levy said. Publishers testing Hiptype in beta, for instance, were surprised by “how low conversion rates are” — early data suggests that only three to four percent of people who download a free ebook sample go on to buy the book — and how few people who do buy a book finish reading it. “It can be a bit of a bummer,” Levy said. “But as soon as you start measuring, you can do tests and see what moves the needle. We’re already doing research on the data we’re collecting. As data hackers, we think there are underlying patterns here even if they’re not apparent at first.”

“iBooks 2 looks very interesting from a commercial point of view. From a creative point of view, it’s very, very, very disappointing,” said Alex Morrison, managing director of Cogapp, developer for Dorling Kindersley’s Eyewitness travel guides and other iOS apps.

Why? “Because it’s just eye candy. The capacity for the user to interact is so limited. The degree of feedback about consumption of our content is so limited.”

Apple (NSDQ: AAPL) last week signalled its intention to tap in to a multi-billion dollar education sector it sees as lacklustre with a new iBooks 2 software distribution channel and a new iBooks Author creation tool. Morrison was speaking at a UK Association of Online Publishers’ forum about tablet publishing strategy in London on Wednesday.

“It’s a good way of producing a very glossy app,” he told an audience. “But it’s a huge missed opportunity. Maybe it’s a good first step. But I’d be be very worried that Apple thinks they’ve done it now.

“At the moment, there’s no way to automate the process of getting products in there. It looks like Apple has put it out there quickly, probably as a defensive move. At the moment, my lab is looking at ways of getting products in through the back door.”

Morrison’s Cogapp is also an interactive producer for the Good Schools Guide International, The National Archives and Apple UK.

There are already thousands of digital textbooks available on the iPad, as well as on other devices like PCs and Barnes & Noble’s Nook Tablet. But as my colleague Annie Corbett and I have written, eTextbooks are a transitional product, accounting for only 2.8% of the $8 billion US textbook market in 2010. The vast majority of digital textbooks are not very innovative; they’re essentially print replicas with digital extensions like highlighting, search, and annotation. The iPad-which now outsells Macs in schools, according to Apple-is capable of much more then what has previously been produced, and Apple hasn’t been satisfied with the status quo. Today, Apple demonstrated iBooks2, a new textbook experience for the iPad; these new textbooks can be created using iBooks Author. iBooks2 will solve two product strategy problems for publishers:

– Production cost. Companies like Inkling are doing quite well helping publishers take their education apps to the next level. The problem is that publishers’ content creation and production processes are still optimized for print, not digital, so working with Inkling is expensive (in terms of publishers’ labor, not necessarily Inkling’s fees). So most publishers opt to create a small number of new apps, and settle for digital replicas or “enhanced eBooks” of everything else.

– Discoverability. When publishers do create digital products, they complain that students can’t find them. For example, on Amazon (NSDQ: AMZN), shoppers need to scroll past the regular eBook to find the enhanced one, and it’s not immediately evident that the enhanced product justifies the higher price. Apple’s iBooks2 now has a brand new textbook category, and will centralize distribution of iBooks and make products more discoverable than they are today.

However, in solving these problems for publishers, Apple also solves them for everyone else. Like iTunes and the App Store before it, iBooks2 and iBooks Author, democratize the publication and distribution of content-a small musician or developer now has access to the same tools and marketplace as the largest media and software companies. What this means: We’ll see an avalanche of new companies and new content for the education market-and many of the best innovations will come from these smaller companies, not the biggest publishers. Large publishers will still dominate the majority of content sales nationwide; new apps will be largely supplemental to traditional or digital textbooks. But over time, we expect more widespread sales erosion for large publishers, who will try to recoup some value by acquiring the smaller app innovators.

The lesson here for product strategists beyond the education market is that if you don’t rip off your own Band-Aid by investing in innovation now, a company like Apple will come along and do it for you-and it won’t sting any less.

Sarah Rotman Epps is an analyst at Forrester Research, where she serves Consumer Product Strategy professionals and blogs.

This article originally appeared in Forrester Research.