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.