Right. The only thing that matters is that there are now two apps in the app store called "paper". It doesn't matter if one app is for sketching, and the other is a news aggregator. The simple fact that they both have a similar name, and that name itself is a common word, and both apps are sold from the same source is proof that both need to change it.
And yeah, these conversations almost always lead to "well, what about Windows", or "What about Apple"? "They're both common names, why can they get away with it". What it all comes down to is likeliness of confusion. There's only one Apple that makes computers. Only one OS called Windows. You won't ever confuse Bill's Apple Store that sells apples with an Apple Store that sells Macs and ipads, and you won't accidentally go out and buy Microsoft Windows when what you wanted were some triple paned energy saver windows. They're singular entities and products, and aren't likely to have any accidental trademark disputes. Programming a new OS or starting a new computer company takes a bit of effort and research.
But apps, like books, proliferate constantly. You could see dozens of them released on any given day. For things like that, trademarks have to be more specific. Like you can't claim ownership of single words like "paper" or "candy" or "saga", because those words could be used in any number of combinations. You could trademark "paper candy saga" in its entirety though, since it's relatively rare that someone would use those three words in that combination.
And yes, there are exceptions to what I said above. There are always exceptions. But what I'm talking about above is the sortakinda general rule of things.
