Jack Ellis

The Beijing IP Court has overturned a local administrative ruling which could have seen Apple’s iPhone 6 and 6 Plus smartphones banned from sale in the Chinese capital over an alleged design rights infringement.

Agence France-Presse (AFP) reported at the weekend that Beijing’s specialist IP court had ruled in favour of Apple in a long-running dispute involving the US company, a defunct Shenzhen-based device maker and the local branch of China’s State IP Office (SIPO).

Back in May last year, the Beijing IP Office found that the iPhone and iPhone 6 Plus models infringe on a design patent owned by Shenzhen Baili. An investigation by the Wall Street Journal indicated that Baili – which seems to be affiliated to the better-known smartphone company Digione – had become insolvent and is no longer offering products for sale. The asserted design right relates to the outward appearance of its 100C smartphone model. Speaking to World Trademark Review’s sister publication IAM at the time, Andy Yang, managing partner at Wis & Weals in Beijing and counsel for Baili in the case, said that his client had initially approached Apple to discuss a licence in September 2014. Baili filed an administrative infringement complaint with the Beijing IP Office three months later, after the apparent failure of this approach.

The office issued a Beijing-wide injunction against Apple, though this was quickly stayed pending the US company’s filing of an appeal with the Beijing IP Court, which was heard in December. According to the China Daily, Apple’s lawyers argued that there were at least 13 technical differences between the outward appearances of the iPhone 6 and the 100C that were easily distinguishable to the average consumer – and that the IP Office’s finding of infringement and sales ban should therefore be overruled. The Beijing IP Court did just that when it handed down its decision last week. As reported by AFP, it found that Baili’s infringement claim was without legal basis. In its verdict, the court said that it “quashes the decision of the bureau” because the iPhone 6 had features that “completely change the effect of the entire product… and both phones are easily distinguishable in the eyes of consumers”.

Yang suggested that Baili would launch its own appeal; he is reported as telling RTTNews: “We think some of the facts ascertained by the Beijing IP court are not accurate, so Baili is definitely going to continue to safeguard its legitimate rights.” Nevertheless, Apple will be pleased with the Beijing IP Court’s decision in the case – just one of numerous IP challenges it has faced in China in recent years. “Baili has been trying to claim our work as their own and we thank the Beijing IP Court for recognising the value of Apple's unique and innovative design,” RTTNews quotes an Apple spokeswoman as saying.

The ruling also looks like it represents a common sense victory for all brand owners doing business in China. Despite the nomenclature, ‘design patents’ issued by SIPO are – like those issued by the USPTO – largely the same as the industrial design rights granted by the EU IP Office and many other national IP agencies. They cover the ornamental design features of a product, rather than the function of an invention. Likewise, applications for design patents do not undergo substantive examination prior to being registered or rejected by SIPO.

On the one hand, this may be interpreted as meaning that design rights are easy to obtain in China; and, as such, they could cause similar headaches for foreign brand owners looking to launch in the country as has been the case with trademarks and ‘squatting’ under the strict first-to-file system. However, the Beijing IP Court’s seemingly sophisticated line on the Apple case – where they took widespread public recognition of the iPhone series into account – also shows that businesses may be able to rely on the fame of their products’ look and feel to protect their brand assets in China, at least to an extent. With design now as crucial to brand identity as trademarks, Apple’s success in this case can be seen as a positive development – though any appeal from Baili could change that. 

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