Apple loses exclusive right to iPhone trademark in China

An outlet of Apple Inc in Tianjin. [Photo provided to China Daily]

Apple Inc has lost exclusivity on the use of the "iPhone" trademark in China and has to share it with a Beijing-based leather products maker.

The Beijing Municipal High People's Court has ruled in favor of Xintong Tiandi Technology (Beijing) Ltd, which sells a number of leather products such as smartphone cases and handbags under the name "IPHONE".

In 2002, Apple applied for the "iPhone" trademark for its electronic goods in China, but it wasn't actually granted until 2013.

Xintong Tiandi filed for its own "IPHONE" trademark in China in 2007, the same year the first generation of Apple's iPhone was launched in the United States.

In order to obtain the exclusivity on the use of the "iPhone" trademark in China, Apple first took the case to the Chinese trademark authority in 2012, but it failed as the agency claimed Apple couldn't prove the name "iPhone" was a well-known brand prior to Xintong Tiandi's registration in 2007.

Apple then filed a lawsuit in a Beijing court. However, the court ruled against it and Apple appealed to the Beijing Municipal High People's Court.

The court said that the company didn't sell the iPhone in the Chinese mainland until 2009.

The final judgment means Xintong Tiandi could continue to use the trademark to sell its products.

Apple didn't comment on the ruling.

It came as Apple's latest quarterly earnings showed a 13 percent drop in revenue as sales of iPhones slipped. China was a particular weak spot as the sales in China fell 26 percent to $12.49 billion, due to weak demand for iPhones.

Xintong Tiandi confirmed the court ruling on its website and said the decision represented a victory for free consumer markets.

James Yan, a Beijing-based analyst at Counterpoint Technology Market Research, said: "The failure of the trademark fight would not have a great impact on Apple's brand and image, but it might confuse consumers as they don't know whether these products are made by Apple or some producers copy Apple's name, when they are buying leather products embossed with the 'IPHONE' brand."

Zhu Dalin, an analyst at Beijing-based Internet consultancy Analysys International, agreed.

Zhu said the influence of Xintong Tiandi is very minor, which wouldn't pose a threat to Apple anyway, and Apple mainly focuses on electronic devices, such as smartphones and iPads.