Did Apple really lose the iPhone trade mark battle with a Chinese handbag maker?

iPhone v IPHONE

Reports have filtered through from China that Apple have lost control of the trade mark ‘iPhone’, because a Chinese company has successfully:

1. obtained a Chinese trade mark registration for ‘IPHONE’, in relation to leather handbags, phone cases and passport holders, and
2. defended revocation action brought against them by Apple.

Apple filed a Chinese trade mark application for the term ‘iPhone’ in 2002, in relation to mobile phones. This application was eventually registered in China in 2013.

In the meantime, Beijing-based company Xintong Tiandi Technology (‘Xintong’), filed a trade mark application for ‘IPHONE’ in 2007, in relation to ‘leather handbags, phone cases, and passport holders’. This was registered in 2010.

In 2012, Apple brought a case before the Chinese Trademarks Office for removal of Xintong’s Trademark. When their case was unsuccessful, Apple brought a second action to try and revoke Xintong’s trade mark before a lower Beijing Court.

Once again they were unsuccessful, and Apple appealed to a higher court, which in turn upheld the lower court’s decision – on the basis that Apple could not prove ‘iPhone’ was a well-known brand in China before Xintong filed its trade mark application in 2007.

This means that Xintong can continue to use the name ‘IPHONE’ in relation to sales of handbags and other leather goods – including phone cases.

With the benefit of hindsight, there are several points we can take from all this:

• Why didn’t Apple seek to expedite examination of its Chinese trade mark? It took more than ten years for the ‘iPhone’ trade mark application to reach registration. If Apple’s mark had been registered before 2007 – i.e. within five years of filing their application – then Apple might have been in a stronger position by the time Xintong made their application.However, merely placing the letter ‘i’ before another word does not create a particularly distinguishable trade mark, so it’s possible Apple may in any case have had difficulty opposing Xintong’s application.
• Why didn’t Apple include mobile phone accessories within a specification of goods and services with their 2002 filing? US trade mark applications are typically narrow, and it’s possible that the Chinese trade mark application was filed in accordance with a corresponding US application.
• Different jurisdictions have different approaches. As a general guide, in order to be registrable a trade mark must not be in conflict with an earlier pending or registered trade mark, but it’s crucial to be aware of local rulings.
• A conflict only occurs when two trade marks are either substantially identical, or deceptively similar – and both marks are to be used in connection with goods or services that are the same, or closely related. This means that a later trade mark application (in this case, Xintong’s application for ‘IPHONE’) may be allowed, even if the mark is substantially identical to an existing mark, provided that the Trademarks Office believes there is no overlap between the respective goods or services.In this case the Chinese Trademarks Office decided that there was little or no overlap in trade between mobile phones and leather handbags or phone cases.
• Apple does not appear to have kept a watch on the Chinese trade mark application for ‘IPHONE’ filed by Xintong. Apple only became aware of Xintong’s trade mark application after it became registered, and so they missed an opportunity to oppose registration.In contrast to this case, Facebook has, as recently as 9 May 2016, successfully brought an action to remove a registered Chinese Trademark for ‘facebook’ filed by a Chinese company in 2014.The basis of the successful action appears be the established reputation of Facebook in China before 2014, and that the word ‘facebook’ is more inherently distinctive as a trade mark.