That depends on what their app did. From what I can make out with Google cache, it was a timer app.

The two trademarks Facetime Corp held (and which Apple has supposedly bought) orient around "computer software used for communicating over global computer networks using voice, text, fax, or e-mail."

A timer app called Facetime doesn't on the face of it appear to violate either of these other Facetime trademarks but.. trademarks are a wishy-washy world of legal wrangling, so it seems Apple's prepared to just push their weight around since they own the store and have the right to do so.