‘IPHONE’ Trademark Fight Illustrates Apple’s Headwinds in China

| Analysis

As if cued to prove Carl Icahn's worries about Apple's business in China, the company lost a trademark battle with a bag maker over "IPHONE" in that country. A Chinese court ruled that even though Apple filed its trademark several years before Chinese company Xintong Tiandi (site down as of this writing) did, Apple didn't start selling its iPhone until later, so whatevs.

Quartz has an excellent report describing the process the case went through and the reasoning of the Chinese court. Read it because it's interesting.

But the bottom line is that this is a thing, made all legal-like by the Chinese legal system:

IPHONE Handcrafted Passport Wallets

IPHONE Handrafted Passport Wallets

So is this:

IPHONE Sleeves

IPHONE Sleeves

Last week I wrote that Carl Icahn wasn't wrong when he decided to unload his $AAPL shares over concerns that China could make business hard for Apple (locking in US$2 billion in profits in the process). This sort of buffoonery where a company has the legal right to stamp "IPHONE" on handcrafted leather goods—including smartphone cases—is an example of why Mr. Icahn's concerns have merit.

Is it the end of the world for Apple? Certainly not, but the Chinese government and its court system can throw up any sort of road block in Apple's way that it wants, and both institutions have proven repeatedly that they are not only willing to do so, they are interested in doing so.

Apple CEO Tim Cook said during his quarterly conference call with analysts that he is confident in Apple's future in China. He iterated that same stance Monday on CNBC's Mad Money with Jim Cramer, where he went into even more detail as to why he is confident.

Personally, I trust that confidence, but that's separate from trusting the Chinese government to treat Apple fairly, especially in the face of political expediency or when it comes to benefitting a local company.

As for Xintong Tiandi, the company posted a statement on its site saying the ruling reflected a "free market," by which I assume they mean a market where everyone's IP is free to be exploited. The company also said, "We will also make full achievement of the 'iphone' trademark, and work together [with Apple] to benefit more iphone consumers!"

So there's that.

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So, just rebrand the device in China. If the market is that important to Apple’s future, that would be a small price to pay. Of course, the name is not China’s problem with Apple; what they want, among other things, is a larger slice of the Apple pie, and using their “legal” system to throw roadblocks is a tool to accomplish that (also a good way to rub America’s nose in it).

If Apple wants those billions of Chinese on iPhones, they will have to sacrifice their standards to get that market. Will be interesting to see how far they will go to achieve that.


This may not be particularly germane, but what does the word “IPhone” have to do with leather goods? Particularly in China? Are they in the habit of stamping an English trade word on products for sale inside China? If they are export goods, then to my mind the trademark for the leather goods would have no presence in China anyway. Oh, well, it’s just China doing what China does. It’s not like we haven’t seen this before.



Listen comrade,

Do not think in such counter-revolutionary terms.

All Yankee imperialist exploiters, and their running dogs, need to understand that all (your) property, intellectual and real, are belong to us, the People. This capitalist notion that your ideas and works are your own is bourgeois and elitist and destructive to the common good, and not at all in keeping with the higher ideals of communism (and the profits of the Party). No. All ideas arise from the People and must be returned to the People (and a cut of the proceeds to the Party).

Perhaps you might enjoy spending some time (like the rest of your life) in a re-education facility where you can attain enlightenment and conform (or die, whichever comes first) to the principles of the cultural revolution.

Apple are learning to be socially responsible, for the benefit (profit) of all (but especially the Party).

Peter Dufosse

Fix this typo in the first sentence, please, as it is driving me nuts:

As if cued to prove Carl Icahn’s worries about Apple’s business in Chain, (China I assume…)

Bryan Chaffin

Thank you so much, Peter! I can’t believe you were the first person to bust me on that, but I’m glad someone did. It’s fixed now. smile

Bryan Chaffin

wab95…you crack me up as always. :D

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