BEIJING — Amid the opacity of China’s social systems, the clichés can sometimes pile up: Game of smoke and mirrors. Wild-goose chase. Stumbling block.
A recent high-profile court case involving Apple and a Chinese company, Xintong Tiandi, which sells leather goods under the iPhone trademark, involved all of those.
Here’s a summary: On March 31 the Beijing Higher People’s Court upheld earlier rulings by a lower court and China’s trademark arbitration board that Xintong Tiandi had the right to use “iPhone” for products in Class 18 of the international trademark classification system, since Xintong Tiandi acquired the trademark in 2007 when the iPhone name was “not renowned” in China, the court ruled. Apple has the rights in Class 9, which covers computers and smartphones. Class 18 covers leather goods.
Here’s the smoke and mirrors: Xintong Tiandi didn’t exist in 2007. A Russian company acquired the rights then and Xintong Tiandi bought the rights from it in 2011, the Chinese company’s lawyer, Xiong Zhi, said in a telephone interview. Public company filings show that Xintong Tiandi was set up in 2011.
It may matter, because iPhones went on sale in China in 2009 amid frenzied scenes. By 2011, it was the smartphone of choice for China’s smart set, and arguably “renowned” in China. The purchase date of the trademark raised questions about the good faith of the Chinese company, some lawyers said.
“It is a moral argument,” Matthew Dresden, a lawyer with Harris Moure in Seattle who specializes in Chinese intellectual property law, said in a telephone interview.
“But the company that filed for it in 2007 must have known what they were doing then, too,” Mr. Dresden added.
Still, the issue of intent and when Xintong Tiandi acquired the trademark may not affect the ultimate outcome of the case, Mr. Dresden said. Apple has said it will appeal to the Supreme People’s Court.
Whatever rights the Russian company had or didn’t have are what Xintong Tiandi bought, Mr. Dresden said. “For better or worse that’s what they purchased,” he added. “In the logic of how the Chinese trademark system works, it makes sense that it should be viewed as what was the state of the world at the time that it was filed.”
“I don’t see this as the Chinese court being biased; I see it as them enforcing the trademark law as it is currently implemented,” Mr. Dresden wrote later in an email.
Here’s the wild-goose chase: Calls to the Beijing Higher People’s Court seeking clarification on the ruling went unanswered over the course of a recent afternoon, and no fax number could be located for the court.
A person answering the telephone at the media office of the State Administration for Industry and Commerce, which oversees the Trademark Review and Adjudication Board that first ruled in favor of Xintong Tiandi in the case in 2013, berated a reporter who said she was from The New York Times: “What question do you have? Can you speak?” When the reporter said she had been unable to send a fax to the office, the man said: “I only heard the fax machine beeping; how would I know who that was from and what it was about?”
When the reporter said she may file a complaint for rudeness, he replied: “You said you want to file a complaint, go file a complaint!” The man hung up without giving his name.
Mr. Xiong, Xintong Tiandi’s lawyer, explained the omission of the Russian ownership detail thus: The court was not obliged to recap the entire history of the case in the ruling.
He rejected what he said were unfair remarks by “some foreign media” that the court’s decision showed the Chinese judicial system was not to be trusted. “Fairness cannot be judged based on whether one has won or lost, but should be based on whether there are problems in the procedures,” Mr. Xiong said.
It’s not the first time that Xintong Tiandi has clashed with Apple over trademarks. Apple had “prevailed in several other cases against Xintong” for similar issues, Carolyn Wu, an Apple spokeswoman, said in a statement.
Mr. Dresden’s conclusion is robust: Companies need to do more to protect themselves in China, even buying the trademark rights for all 45 classes.
Whether that’s a stumbling block or a solution, readers can decide.http://www.nytimes.com/2016/05/19/world/asia/apple-iphone-xintong-tiandi-china.html
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