Apple Acquires The "i-phone" Trademark In China

Written on January 7, 2010 by

Apple has finally ended its iPhone trademark problem in China by acquiring the rights to the "i-phone" mark from Hanwang Technology. The acquisition ends a dangerous intellectual property and marketing situation for the company.

As I wrote in an earlier post, because of an apparent oversight in coordinating its marketing strategy and trademark strategy, Apple faced the prospect of not being able to use the "i-phone" mark in China. That would have greatly impacted its efforts to market the iPhone in China.

I suggested that Apple could purchase or license the i-phone trademark from Hanwang.  The company decided to buy the rights to the i-phone trademark. This move made the most strategic sense, as it was the fastest and cleanest way to secure the trademark.

But the purchase is not without its problems.  Apple's acquisition of the mark from Hanwang is unpopular with the Chinese public, with 80% of those polled being against the deal.  Because of public relations concerns, the companies are not releasing the details of the deal.

How Legally Informed Strategy Could Have Benefited Apple

This example demonstrates the business and marketing strategy benefits of Legally Informed Strategy.  Legally Informed Strategy focuses on integrating legal moves with business strategy. It considers how legal moves will impact the business. Had Apple's product development, marketing, and legal teams worked together, the company could have better optimized its business and legal risks. In this situation, there appears to have been a disconnect between these parts of the company. As I pointed out in another post, business and legal all often operate in separate silos.  The result is unbalanced risk where business and legal risks are not optimized.  Thus, Legally Informed Strategy can strengthen risk management efforts.

Douglas Y. Park
Twitter: @DougYPark

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5 Comments - Leave a comment!

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  • http://soupablog.com paul soupiset

    Hey Doug,

    Can you proffer a quick example or two how "Apple’s product development, marketing, and legal teams work[ing] together ... could have better optimized its business and legal risks" — do you mean years ago, prior to the original stateside IP? Or the post facto China strategy (or lack thereof?)

    Fascinated and curious. Thx

  • http://soupablog.com paul soupiset

    Hey Doug,

    Can you proffer a quick example or two how "Apple’s product development, marketing, and legal teams work[ing] together ... could have better optimized its business and legal risks" — do you mean years ago, prior to the original stateside IP? Or the post facto China strategy (or lack thereof?)

    Fascinated and curious. Thx

  • http://www.dypadvisors.com Doug Park

    Hi Paul,

    Thanks for your question.

    Unfortunately, all too often, product development, marketing and legal do not collaborate as well as they might. Often times marketing and PD will come up with ideas and then ask legal to approve them. Legal is not involved from the beginning of the process. As a result, legal does not have a sufficient business context in which to evaluate risks and opportunities.

    Why does this happen? Because the business people do not think legal understands the marketing or business development strategy. I have heard many frustrated business people say their lawyers do not understand strategy or management concerns.

    However, business and legal are intertwined. Lawyers can contribute to risk optimization, if they understand the business strategy.

    The collaborative process could have worked better when Apple was first developing its plans for the iPhone -- that is, prior to the original US intellectual property. Apple's business development team surely knew when launched the iPhone in the US that they wanted to sell it in China. Hopefully the lawyers did too. For some reason, Apple waited to apply to register the trademark in China after they registered the mark in the US.

    The question is why. Were the lawyers out of the loop? Did they immediately advise the business development team that they needed to apply for a trademark in China? Maybe there was no trademark strategy that connected to the business strategy for the iPhone?

    Regardless, better integration of legal moves with business strategy could have avoided the situation Apple found itself in. Successful integration requires that business and legal find ways to work better. This is a two-way street that I will write more about in future posts.

    Doug

  • http://www.dypadvisors.com Doug Park

    Hi Paul,

    Thanks for your question.

    Unfortunately, all too often, product development, marketing and legal do not collaborate as well as they might. Often times marketing and PD will come up with ideas and then ask legal to approve them. Legal is not involved from the beginning of the process. As a result, legal does not have a sufficient business context in which to evaluate risks and opportunities.

    Why does this happen? Because the business people do not think legal understands the marketing or business development strategy. I have heard many frustrated business people say their lawyers do not understand strategy or management concerns.

    However, business and legal are intertwined. Lawyers can contribute to risk optimization, if they understand the business strategy.

    The collaborative process could have worked better when Apple was first developing its plans for the iPhone -- that is, prior to the original US intellectual property. Apple's business development team surely knew when launched the iPhone in the US that they wanted to sell it in China. Hopefully the lawyers did too. For some reason, Apple waited to apply to register the trademark in China after they registered the mark in the US.

    The question is why. Were the lawyers out of the loop? Did they immediately advise the business development team that they needed to apply for a trademark in China? Maybe there was no trademark strategy that connected to the business strategy for the iPhone?

    Regardless, better integration of legal moves with business strategy could have avoided the situation Apple found itself in. Successful integration requires that business and legal find ways to work better. This is a two-way street that I will write more about in future posts.

    Doug