Intellectual Property: learning the lessons from Apple’s setbacks in China

By July 06, 2016
Apple Chine

Apple has been getting into legal hot water in China. Valérie Feray, a lawyer and Managing Partner at intellectual property law firm IPSILON, sheds some light on the situation.

Apple has run into a series of obstacles in China recently. Following the company’s failure to wrest the iPhone name back from a Chinese leather goods maker that had filed the trademark designation for itself, Apple has now been accused of patent infringement by Shenzhen Baili, a local mobile phone manufacturer.

The legal attacks, which occasionally seem to verge on the comical, look set to continue. On June 30, SARFT –  the State Administration of Press, Publication, Radio, Film and Television, a government agency supervising audiovisual media content production in the country – brought a lawsuit against Apple and Youku, China’s version of YouTube, on the grounds that they were enabling Chinese Internet users to illegally download the 1994 film ‘Xue Bo Di Xiao’ from the iTunes store.

Are the Chinese authorities being especially hard on Apple? Hard, certainly, but then they tend to be tough on every foreign company! So we asked an intellectual property expert to shed some light on the Chinese market, and suggest some best practice.

This interview (in French only) was initially broadcast on L’Atelier numérique (L’Atelier Digital), on the BFM Business Channel – with Valérie Feray, Managing Partner at intellectual property law firm IPSILON, which specialises in patent filing and tracking and defending intellectual property rights.

L’Atelier: Apple being accused of plagiarism in China is pretty ridiculous, when you look at recent statements made by Jack Ma, the Executive Chairman of Chinese e-commerce giant Alibaba to the effect that Chinese counterfeit goods are often better than the originals! How can this have happened to Apple? What did Apple fail to understand?

Valérie Feray: What happened here was that a startup called Shenzhen Baili had filed a patent covering smartphone design in China. Shenzhen Baili then obtained an injunction from the Beijing industrial tribunal, blocking the sale of Apple’s iPhone 6 and iPhone 6 Plus in China on the grounds that the external shape of these models infringes its patent. It seems that Apple does not have any patent protection for these models. However, this is the lowest court in the Chinese legal system and this type of injunction can be obtained fairly quickly. Apple immediately lodged an appeal and has now won the right to continue to sell its iPhone 6 and 6 Plus, pending the appeal decision.

In this particular case, what counted was that the tribunal was able to identify a number of similarities between Shenzhen Baili’s 100c and the iPhone 6. Consumers don’t necessarily see the differences, only the external similarities, so they might suppose that the iPhone 6 is a copy of the 100C. These are the arguments that swayed the court.

But this isn’t the first time Apple has been given the run-around in China. Apparently there are even counterfeit Apple Stores…?

Yes, there are fake Apple Stores which are perfect copies of the real Apple Stores you can see in the United States, for example.  In some of the fake stores the staff even believe they’re actually employed by Apple!

So what lessons should a Western company looking to set up in China learn?

Well, we advise all our clients to file absolutely everything with the Intellectual Property Office: patents, brands, and also physical models. Why do you need to protect yourself in this way? Because in China, an increasing number of Chinese players are taking out this kind of protection so to compete on the Chinese market you need to arm yourself with the same weapons as they use.
Better safe than sorry! Legal protection lasts a long time in China. For a brand there’s no time limit at all; for a patent, it’s twenty years. And that’s plenty!


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