Apple filed a Opposition/Response to Motion (PDF, courtesy of TechFlash) with the USPTO. Here's an excerpt of Apple's argument:
Microsoft now asks the Board to summarily eradicate Apple’s commercial rights in its APP STORE mark on the purported basis that APP STORE has become generic. Having itself faced a decades-long genericness challenge to its claimed WINDOWS mark, Microsoft should be well aware that the focus in evaluating genericness is on the mark as a whole and requires a fact-intensive assessment of the primary significance of the term to a substantial majority of the relevant public. Yet, Microsoft, missing the forest for the trees, does not base its motion on a comprehensive evaluation of how the relevant public understands the term APP STORE as a whole.
If Microsoft managed to trademark Windows all those years ago, should Apple be allowed to trademark App Store?