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The Chinese Trade Mark Saga – Facebook Wins Trade Mark Case

Facebook wins trademark case in China

While Apple Inc lost its trade mark case in China, Facebook has made headway by winning their trade mark case for its own brand name. A Chinese vegetable oil and potato chips maker called Zhongshan Pearl River registered ‘face book’ in 2014, but the courts in China have revoked the trade mark.

Why did Facebook win while Apple lost its case?

Although Facebook is blocked in China, it is still accessed by a large number of Chinese web users through VPN (Virtual Private Networks). Under Chinese trade mark laws, a global brand has to prove that its trade mark is also well known in China. In Apple’s case, the court decided that the ‘iPhone’ trade mark wasn’t well known, in China, when it was filed by the company.

Proving recognition

Facebook’s founder has been leading a charm offensive to woo Chinese government officials to allow Facebook to operate in China. The brand has been popular in the country for a while and as stated above, it has a sizable user base in the country. This has allowed Facebook to revoke the trade mark filed by the Chinese company.

The Supreme People’s Court decided that Zhongshan Pearl River had “violated moral principles” with “obvious intention to duplicate and copy from another high-profile trade mark”. Very aptly worded judgement from the Supreme People’s Court.

Learning from Apple’s trade mark issues in China

Apple's trademark issues with 'iPhone' in China

Apple Inc, the tech giant, recently lost a court battle over the use of the word ‘iPhone’ on leather goods in China. A local company called Xintong Tiandi will continue to have the legal right to use ‘iPhone’ on leather goods. As expected, Apple wasn’t happy with the decision and will be requesting a retrial in the Supreme People’s Court. As this trade mark battle continues, what lessons can be learned from this episode?

The trade mark system in China

The Chinese trade mark system is considered to be complex and murky. Trade marks can be filed on a ‘first to file’ basis instead of ‘first to use’ basis. What this means is that any company that files a trade mark first has an opportunity to obtain the registration. A trade mark search in the Chinese Trade Mark Office website shows 247 different results for ‘iPhone’ under different trade mark classes. Most of these are from local companies.

‘iPhone’ trade mark history in China

Apple filed a trade mark application for the word ‘iPhone’ in 2002, but only for computer hardware and software. The registration was granted in 2013. Xintong Tiandi had filed for its ‘iPhone’ trade mark in 2007 when the iPhone went on sale globally. The court decided that trade mark wasn’t popular and synonymous with Apple in China until 2009 when it was introduced in the country. Based on this, they lost the case.

Learning from Apple’s trade mark issues

Apple previously had an issue with their trade mark ‘iPad’, which they bought from the wrong company. It is common to find ‘trade mark trolls’ in China. Companies looking to expand into China might find that their trade mark is already registered. The most effective method of overcoming this issues is to file your trade mark as soon as possible. Had Apple filed ‘iPhone’ under multiple classes it would not have been in the situation it is in today.

Apple will continue to pursue this case because of its financial strength and a strong case, but most small to medium sized businesses would not be in the position to do so. As stated, the best advice is to protect your brand as soon as you create it.