Apple Loses Exclusive Use of the iPhone Brand In China

For all the ostensible disdain business people often express about lawyers in the developed world, this case is a reminder of the benefits that the rule of law confers. JL

Andrew Griffin reports in The Independent and Bryan Clark reports in TNW:

The American company failed to prove the name was a ‘famous brand’, and so a Chinese firm can keep selling (leather) phone cases with  iphone on them. China remains a lucrative market for US companies, but it’s certainly not without its frustrations.
A Beijing court said Apple wasn’t able to prove that iPhone was a “famous brand” in China, before the local company applied for a trademark in 2007, the year the phone was released. That means that the ownership of the name is still with the local Xintong Tiandi Technology company.
The decision came in late April and means that the Chinese company can keep using the name on mobile phone cases, wallets, handbags and other leather goods.The decision could come as another knock to Apple’s business in China, which is the company's second biggest market and where it hopes to gain much of its future growth from. The company has had other problems in the Chinese market, with a drop in the growth of iPhone sales and disruption to some of its services.
Apple first applied to trademark iPhone for computers and software in 2002. Xintong Tiandi applied to use the name a month before Apple’s phones went on sale in China in 2009 – but two years after the iPhone was largely available across the world.
Apple’s lawsuit was filed in 2012, and challenged the Chinese company’s use of the name on a range of leather products.
Apple and Xintong Tiandi, a Chinese company that makes leather goods, have been fighting in Chinese courts since 2012 over the latter’s use of a brand name Apple feels it owns: ‘iPhone.’
While it seems like a no-brainer to allow Apple sole exclusive rights to a product that it made famous throughout the world, it wasn’t actually the first to trademark the name — technically speaking.

So. Much. Tech.

Although Apple filed for the trademark in 2002, it wasn’t officially approved until 2013 under ‘Class 9: Electrical and Scientific Apparatus.’

In 2007, Xintong Tiandi applied for the same trademark under ‘Class 18: Leather Goods;’ the trademark was approved in 2010.

While Apple filed first, Xintong Tiandi was actually the first to own the trademark, albeit in a rather convoluted way. Because of this, Chinese courts (and the local patent authority) have refused to strip the trademark.
After losing its original claim to the trademark authority in China — and then in a lower court in Beijing — the final nail in Apple’s coffin came on March 31 as the Beijing Municipal High People’s Court rejected Apple’s appeal (Chinese link) and ruled that Xintong Tiandi could continue to use the name iPhone on its products.
Xintong Tiandi seemed pleased with the verdict in a message on its website (Chinese link).
Quartz translates:

Xintong Tiandi wrote on its website (link in Chinese) that the court’s decision is a reflection of a “free market.” “We will also make full achievement of the ‘iPhone’ trademark, and work together [with Apple] to benefit more iPhone consumers.”

China remains a lucrative market for US companies, but it’s certainly not without its frustrations.