Tag: iphone

Why Apple lost its case in China but Facebook won?

For those who are interested in the Chinese trademark laws, they may have heard that Apple lost its case in China with respect to the “IPHONE” mark in Class 18. As the result, the Chinese court decides that a Chinese company owns the “IPHONE” mark in Class 18 and therefore has the right to use the “IPHONE” mark on its leather wallet and purse products.

For the details of the “IPHONE” trademark case, please see our earlier article on this case, “Chinese court decides that “IPHONE” is not a well-known trademark“.

However, on a similar case with respect to the “face book” mark in Class 32 (beverages), Facebook won the case where the Chinese court decided that the Chinese individual who applied to register “face book” mark in Class 32 had the intention to copy other’s trademark of high popularity, and therefore his trademark application shall not be approved according to the law.

Please refer to the BBC report on the above cases at “Facebook wins China trademark case“.

As these two cases look pretty similar (both cases are about a Chinese company/individual applying for a famous western brand in China in a class which is not directly relevant to the main business of such brand), people are wondering why this happened? Is it true that these cases have different outcomes because of political reasons as hinted by BBC or other western media?

Well, maybe there are some political factors in these cases. However, from the legal perspective, there could be other reasons for the different outcomes.

Differences in the legal arguments made in both cases

For easy review, we compare the legal arguments made by Apple and Facebook as follows:

“IPHONE” case “face book” case
Approving the registration of this trademark will have negative impact to the society. (Article 10.1.8 of the 2001 Trademark Law) Approving the registration of this trademark will have negative impact to the society. (Article 10.1.8 of the 2001 Trademark Law)
“IPHONE” is a well-known trademark and shall be protected in all classes. (Article 13.2 of the 2001 Trademark Law) “Facebook” is a well-known trademark and shall be protected in all classes. (Article 13.2 of the 2001 Trademark Law)
N/A This trademark has infringed the prior trade name right of Facebook. (Article 31 of the 2001 Trademark Law)
N/A Trademark registered by deceptive or wrong means shall be revoked. (Article 41.1 of the 2001 Trademark Law)

As shown in the above table, Apple only made two legal arguments but Facebook made four legal arguments. The first two legal arguments made by Apple and Facebook are the same and none of them was accepted by the Chinese court. The third argument made by Facebook was also not supported by the Chinese court. In the “face book” case, the Chinese court decided in favor of Facebook based on the forth argument made by it.

In the “IPHONE” case, the Chinese court specifically addressed in the final judgment that because Apple did not argue that the “IPHONE” mark breached Article 41.1 of the 2001 Trademark Law, the court did not review this case based on such clause.

Here’s why

From the court’s perspective, there is no much difference in both cases.

The “negative social impact” argument was not accepted by the court because no public interest was involved in both cases.

The “well-known trademark” argument was not accepted by the court because neither “IPHONE” nor “Facebook” can established that it was well-known in China before the application date of the trademark in dispute.

The only difference which leads to the different outcomes of both cases is that Apple did not argue that the “IPHONE” mark was registered by deceptive or wrong means, which allows the judge to review the case from a more general perspective, i.e. whether the registration is in good faith.

To be fair, we have to say that it is not usual to quote Article 41.1 of the 2001 Trademark Law (the “good faith” clause) in a trademark case like the “IPHONE” case and the “face book” case and there is no precedence that the Chinese court can support this argument. However, apparently Facebook took its chance and finally won the case. As for Apple, maybe it is time to consider to change its trademark lawyer in China.

Chinese court decides that “IPHONE” is not a well-known trademark

Apple’s opposition against the “IPHONE” mark in Class 18

On October 18, 2002, Apple Inc. applied to register the “IPHONE” mark in Class 9 (computer hardware, computer software etc.) in China, which was approved on November 21, 2013.

On September 29, 2007, a local Chinese company Xin Tong Tian Di Company (“XTTD“) applied to register the “IPHONE” mark in Class 18 (leather, wallet, purse etc.) in China (“Disputed Trademark“).

After China Trademark Office (“CTO“) preliminarily approved the registration of the Disputed Trademark, Apple filed an opposition against it but the opposition was rejected by the CTO in 2012.

Then Apple applied for re-examination of the Disputed Trademark to China Trademark Review and Adjudication Board (“TRAB“). But the TRAB sustained the CTO’s decision on December 16, 2013.

Arguments of Apple

Apple argued that its “IPHONE” mark registered in Class 9 has gained high popularity and distinctiveness in China and therefore should be deemed as well-known trademark.

Since its launch of the IPHONE on June 29, 2007, it has launched 9 generations of IPHONE products and has been officially selling the IPHONE products in Mainland China since October 2009.

Based on the above, Apple applied to protect its “IPHONE” mark as a well-known trademark in China, which means, it should be protected in all Classes in China even if it has not been registered in a particular Class.

Opinion of the TRAB

The TRAB decided that Apple cannot prove that its trademark had become well-known in China before the application of the Disputed Trademark because its use of the trademark which can be supported by evidences submitted by Apple was all dated after the application date of the Disputed Trademark.

Despite that Apple’s “IPHONE” mark has high popularity on cell phones and relevant products, the current evidences were not sufficient to determine that the “IPHONE” mark had become a well-known trademark in China. It is not likely that the general public in China will associate the Disputed Trademark with Apple Inc.

Decision of the court

Apple appealed the TRAB decision to Beijing No. 1 Intermediate Court and then to Beijing Higher Court. Both courts decided that the “IPHONE” mark was not a well-known trademark before the application date of the Disputed Trademark because the IPHONE was first launched in June 2007 and was only officially sold in Mainland China in October 2009.

At the time of the application of the Disputed Trademark (September 29, 2007), the “IPHONE” mark was not well-known in China and therefore it cannot block the registration of the Disputed Trademark.

Accordingly, Beijing Higher Court finally rejected Apple’s appeal and affirmed the registration of the Disputed Trademark.

Comments from China Filing

Chinese laws do provide special protection to well-known trademarks. However, being recognized as a well-known trademark is not retrospective. Even if a trademark becomes well-known after massive use and promotion, at its early stage when it is not that “famous”, it cannot prevent others from registering the identical or similar trademark on irrelevant Classes (goods or services).

Big companies such as Apple should consider to register its major trademarks in all 45 Classes in China before its launch in China. The registration costs for all 45 Classes may seem to be very high, but it will save a lot of litigation costs in the future and can eventually protect its trademark in all Classes in China.