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.