US technology giant Apple has lost its latest court battle over the rights to use the ‘iPhone’ trade mark in China.
The circumstances are not foreign to Apple - in 2012, the company paid $60 million to settle a similar dispute regarding the right to use the ‘iPad’ name in China.
In this matter, Apple applied for the ‘iPhone’ trade mark in China in 2002 for computer hardware and software in China. However, Chinese company Xintong Tiandi applied for a trade mark for leather goods bearing the word ‘iPhone’, which was approved before Apple’s 2002 application.
According to Chinese law, to enforce their trade mark rights Apple was required to prove that the ‘iPhone’ brand was well-known within the Chinese borders ahead of Xintong Tiandi’s registration. As Apple did not begin selling iPhones in mainland China until 2009, the Beijing Municipal High People’s Court dismissed Apple’s appeal on the basis that it could not prove that the ‘iPhone’ brand was well-known in China at the relevant time.
Apple intends to request a retrial with the Supreme People’s Court of China.
The ‘first to file’ nature of the trade mark system in China is such that unrelated third parties can secure trade mark registrations for trade marks of foreign traders if they file in China first. Foreign businesses often fail to take adequate precautions to protect their intellectual property in China. Major international brands and celebrities such as New Balance and Michael Jordan have faced similar difficulties with securing trade mark registrations in China. Where a product is expected to have global reach, early registration of trade marks in China is critical.
Brand owners should also keep records of evidence of trade mark use and well known reputation along with arranging for a trade mark watching service to monitor new applications for similar marks that should be opposed. Filing the English translation of the brand only may not be sufficient and expert advice should be sought on filing the Chinese character and translation equivalents to ensure broad protection.