Source: http://www.apple.com/iphone/gallery/. Copyright 2009 Apple Computer.
Cupertino, your iPhone has a trademark problem in China.
While Apple is talking to China Unicom about selling the iPhone in China beginning in 2010, MacWorld reports that Hanwang Technology owns the trademark “i-phone” for mobile phones in China. As a result, Apple will run into problems selling the iPhone in China without reaching an agreement with Hanwang, or without attempting to revoke Hanwang’s trademark.
Brief History Of The iPhone Trademark in China
In 2002, Apple registered the iPhone trademark in China. However, its application covered computer hardware and software, but not mobile phones. In 2004, Hanwang, also known as Hanvon, registered the “i-phone” trademark in the category covering mobile phones. Hanwang states that it has sold a mobile phone called “i-phone.”
Apple’s Next Steps With Hanwang
To legally sell the iPhone in China, Apple has two options. First, it can license or purchase the i-phone trademark from Hanwang. Second, it can use the legal strategy of asking the Chinese trademark office to revoke the i-phone trademark. Unfortunately, that process can take several years. Apple is not going to wait three or four years for the outcome of a revocation procedure. It wants to sell the iPhone now. Therefore, Apple needs to negotiate with Hanwang, which it apparently has not done yet.
But there might be another strategy.
Apple’s Legally Informed Strategy, Or Lessons From Chinese Trademark Law
Unlike US trademark law, which is based on a first to use system, Chinese trademark law is based on a first to file system. A company must therefore plan before it decides to market and sell a product in China.
Luis Acuna, visiting attorney at the Grandall Legal Group in Beijing, explains that in China the first to file rule does not apply to famous marks under the Paris Convention. The irony is that fake iPhones have been selling in China, and everyone knows that they are not made by Apple. In addition, real iPhones have been smuggled into China at high price premiums. Don’t these facts suggest that the iPhone is a famous mark with respect to mobile phones? If so, shouldn’t it qualify for the famous marks exception? Apple’s iPhone is certainly more popular than Hanwang’s i-phone in China.
Here’s something to think about. While Apple may have dropped the ball with the iPhone trademark in China, perhaps it can come out smelling like roses if it can use the the fake and smuggled iPhones to qualify for the famous marks exception. Is this a possible example of Legally Informed Strategy being stumbled upon?
Another question is whether Apple can claim it used the iPhone trademark in China before Hanwang, even if not specifically with respect to mobile phones. When did Apple first start using iPhone trademark in China? If you know the answer to this question, please leave a comment.
Douglas Y. Park
Twitter: @DougYPark