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Experts say Apple has trademark weakness

China Daily, February 20, 2012

• China is Apple's most fast-growing market. [File photo]

  The names of iPhone and iPad could wind up on hiking shoes, veterinary drugs or even diapers in China if Apple fails to remedy flaws in its brand strategy, experts say.

  At least 39 Chinese companies and individuals in recent years have attempted to register the two trademarks in categories that Apple has not, according to the China Trademark Website.

  Six, including a flashlight manufacturer, have gone so far as gaining preliminary approval from authorities and were forced to defend their applications when objections were raised in the final disclosure procedure, according to the website, run by the trademark office of the State Administration for Industry and Commerce.

  "Apple objected to our application on the last day of the three-month disclosure," said Xu Jie, a lawyer representing flashlight manufacturer Cai Zhiyong.

  Xu said the trademark office sent a letter to Cai on Feb 15, asking Cai to provide supporting evidence within a month.

  "We received the authorities' go-ahead to move into the disclosure stage, and we are confident we will be successful," Xu said.

  Xu said it took him by surprise when he, at the request of Cai, found Apple had not registered the trademarks in all of China's 45 commercial categories, a practice that other transnational companies follow.

  "Yes, we want to share the benefits of iPhone's fame through the application in 2010," Xu told China Daily.

  Beside the flashlight company based in Yiwu, East China's Zhejiang province, other companies from the Chinese mainland as well as Hong Kong and Taiwan also attempted to cash in on the success of Apple's products.

  According to the website, at least 18 entities attempted to apply for an iPad trademark after 2010, when popularity of the tablet computer exploded.

  A leather factory in Wenzhou, Zhejiang, specializing in belts and hiking shoes and another garment factory in East China's Jiangsu province applied to register the iPhone trademark, respectively, in 2007 and 2010. Their applications are also pending and remain in disputed status.

  There are other applications for the iPad trademark that have passed preliminary approval and now hang in bureaucratic limbo as Apple disputes their claim, such as one by Guangdong glass lens manufacturer Ye Huochai and another by a Guangdong company that makes floorboards and concrete.

  None of the applicants have successfully obtained the trademarks so far, according to the website.

  To date, Apple has registered the iPad in nine categories and the iPhone in 14 categories, according to the website.

  Later this month, courts in China will hear an iPad trademark dispute between Apple and an insolvent Shenzhen-based company called Proview.

  A law enforcer with the Beijing administration of industry and commerce, who declined to give her name, told China Daily the attempts to take advantage of famous names are "immoral but legally permissible".

  She said many international companies have a system for monitoring their trademark properties and Apple "seems to not have managed risks well to protect itself".

  Feng Xiaoqing, a professor who studies intellectual property rights, said flaws exist in the implementation of Apple's brand strategy that result in disputes. Feng said many Chinese companies face the same situation overseas as well.

  He said Apple can seek protection from the Chinese Law of Trademarks that prevents "famous" ones from being registered under other categories.

  "Even if the iPhone has not gained certified status as 'famous brand' in China, the law can grant special protection to well-known brands on condition that the same brand in other categories might mislead and confuse the public."

  Gu Jun, a professor in sociology at Shanghai University, does not think Apple's predicament is due to its negligence.

  "Apple is a big company with legal offices and has enjoyed a good reputation across the world. So it cannot simply ignore Chinese regulations."

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