In China, an iPhone can be found for a small fraction of the official price. It just might not be a phone.
A Chinese company has won the right to sell its leather goods under the iPhone trademark after years of legal back-and-forth with Apple, according to an article in Chinese state news media. The case is yet another that centres on names that are well established in much of the world but that have had to fight for control in China, such as the basketball star Michael Jordan and the shoe brand New Balance.
The Chinese company, Xintong Tiandi, applied for the iPhone trademark in China just after the first Apple smartphones came out, in 2007, according to an article by the state-run Legal Daily last week. Still, Xintong Tiandi’s trademark in China, for leather goods, was approved before Apple’s, which had applied for the rights in 2002, the article said.
The website of Xintong Tiandi features a range of leather products, including pen cases, passport holders, handbags and wallets, all stamped with “iPhone.” None of the products are phones. In a news release issued last week, the company also featured photographs of its other products, like a leather iPad case labelled “iPhone” next to a bottle of Remy Martin Cognac.
In the news release, the Chinese company said that the “huge victory brings esteem to Xintong Tiandi’s promise to protect the iPhone trademark,” before adding that it was willing to work with the American technology giant.
The sentiment may not be shared, however. “Apple is disappointed the Beijing Higher People’s Court chose to allow Xintong to use the iPhone mark for leather goods when we have prevailed in several other cases against Xintong,” the Silicon Valley company said in a statement on Wednesday. “We intend to request a retrial with the Supreme People’s Court and will continue to vigorously protect our trademark rights.”
While the Chinese company’s approach might be perplexing, it testifies to the power of Apple‘s name recognition in the country. The iPhone brand signals middle- or even upper-class status in China, and many are expected to be willing to pay for a passport cover or other item labelled with the Apple product’s name as a way to show that they have made it.
The iPhone ruling, in a high court in the Beijing municipality, is just one of a spate of high-profile trademark and piracy cases in China. The country’s huge number of factories, bolstered by a 100 million-strong class of migrant workers, has made China the workshop of the world, able, among other activities, to quickly pump out products that can make a company a quick profit on the impulse to imitate.
Aiding them is a first-to-file trademark system that lets “unrelated third parties register trademarks which are copies or imitations of well-known brands,” according to a post last year from law firm DLA Piper.
Among other high-profile cases, Michael Jordan lost the rights to the name he is known by in China, and New Balance paid $16 million in damages for what a court said was the illegal use of the Chinese name for the company, which a person had trademarked.
Apple had previously faced a similar situation with the iPad. In 2012, the company was forced to pay $60 million for the rights to use the iPad trademark in China. Apple had bought the rights to the name in a number of countries, but after iPad tablet sales took off in China, a Chinese company said it had not secured the rights in that country.
The case caps a tough couple of weeks for Apple. Last month, the company’s iTunes Movies and iBooks stores in China were ordered shut by a national regulator. The company also reported last week that sales in China had dropped, as it struggles to keep the loyalty and admiration of fickle Chinese consumers.