When it comes to iPhone and iPad, everyone is certainly familiar with it. It is the world-renowned mobile phone and tablet computer brand of Apple Inc. However, when Apple launched iPhone and iPad into the Chinese market, few people paid attention to the trademark story behind it.
In 2007, Apple launched the iPhone, which quickly became popular all over the world and even became a symbol of young people’s pursuit of fashion. In 2009, Apple plans to launch iPhone into the Chinese market. Because it did not conduct trademark layout in the Chinese market in advance, Apple discovered at this time that the iPhone trademark had been preemptively registered by China's Hanwang Technology Co., Ltd. (Hanwang Technology Company for short).
Hanwang Technology Company was founded in 1998 and focuses on the research, development and innovation of text recognition and intelligent interaction technologies and products. According to data, Hanwang Technology Company applied to the Trademark Office for the "I-phone" trademark No. 6233340 in 2004, International Classification Class 9. The designated products include telephones, mobile phones, video phones, etc. If Apple applies for the same or similar trademark on the same or similar goods, the application will most likely be rejected. The “I-phone” trademark owned by Hanwang Technology Company has undoubtedly become a prior rights obstacle for Apple to enter the Chinese market and cannot be avoided. If Apple ignores Hanwang Technology's prior rights, it may bear the risk of trademark infringement, which is completely inconsistent with its status as a world-renowned technology company.
In order to solve the iPhone trademark issue, Apple, which is eager to enter the Chinese market, took the initiative to communicate with Hanwang Technology Company. On April 27, 2018, Hanwang Technology Company released the "Announcement on the Signing of an Agreement for the Transfer of Non-Registered Trademark Rights and Interests". The announcement shows that in order to seek a friendly solution with Apple on an unregistered trademark matter, Hanwang Technology Company transferred the relevant rights and interests of an unregistered trademark in multiple overseas countries to Apple. Apple will pay a total consideration of US$8 million to Hanwang Technology in six installments. The announcement also showed that this transaction will not affect the development and implementation of related domestic and foreign businesses of Hanwang Technology Company. If the agreement can be successfully completed, it will bring revenue of US$8 million to Hanwang Technology Company. It is expected that the contribution to Hanwang Technology's net profit will not exceed US$5 million. Revenue and profit will be recognized in the corresponding year based on the implementation of the contract (the final impact value and impact year shall be subject to the audit results). Subsequently, Hanwang Technology Company disclosed in its prospectus that in July 2009, Hanwang Technology Company reached an agreement with Apple to transfer the "I-phone" trademark to Apple for an amount of approximately RMB 25 million. Since then, Apple has effectively eliminated prior rights obstacles for iPhones to enter the Chinese market through the trademark transfer process. Hanwang Technology attaches great importance to the layout of corporate intellectual property rights and is undoubtedly the beneficiary of this intellectual property transaction. In addition to the "I-phone" trademark, a similar situation also occurred when Apple launched its iPad tablet computer into the Chinese market.
As early as 2000, Proview Technology (Taipei) Co., Ltd. (referred to as Proview Taipei) registered the "iPad" trademark in the European Union, South Korea and other countries. In 2001, Proview Technology (Shenzhen) Co., Ltd. (referred to as Proview Shenzhen) registered the "iPad" trademark in mainland China. On December 23, 2009, Proview International CEO and Chairman Yang Rongshan authorized Mai Shihong to sign a relevant agreement to transfer all rights and interests of trademarks in eight countries around the world to British IP Application Development Co., Ltd. (referred to as British IP Company), including trademarks in mainland China. . As consideration, British IP Company paid Proview Taipei GBP 35,000 for the purchase of all the above-mentioned iPad trademarks. Subsequently, the British IP company transferred the above-mentioned iPad trademark to Apple for a price of 100,000 pounds.
Proview Shenzhen believes that Apple purchased the exclusive rights to the iPad trademark from Proview Taipei. Although Proview Shenzhen and Proview Taipei are both subsidiaries of Proview International, they have no affiliation and are two completely different entities. As a civil subject, the agreement signed by Proview Taipei is not binding on Proview Shenzhen, that is, the exclusive rights to the iPad trademark purchased by Apple do not include mainland China, and Apple was taken to court. The case was settled through mediation in 2012, with Apple paying US$60 million to Proview Shenzhen. It can be seen that because Apple did not conduct trademark layout in advance, Apple encountered prior rights obstacles when launching iPhone and iPad products in China, and ultimately paid a heavy price.
Trademarks are a product of the commodity economy. Only when there are commodities can there be trademarks. From the perspective of economic form, human economic development has successively gone through the eras of agricultural economy, industrial economy and knowledge economy. In the era of agricultural economy, there were few varieties of goods and poor circulation of goods. Trademarks were mainly used to distinguish the source of goods or services. In the era of industrial economy, the variety of goods has increased, especially similar goods, and the circulation of goods has become stronger. Trademarks are not only used to distinguish the source of goods or services, but also an important tool for enterprises to compete in the market and expand capital. In the era of knowledge economy that we are now in, the circulation of goods has become global. In addition to being used to distinguish the source of goods or services, trademarks have increasingly diversified functions.
Today’s trademarks are still the carrier of corporate wealth and reputation, and are an important weapon for companies to participate in market competition. As can be seen from the iPhone and iPad trademark cases, trademarks, as intangible assets, have financial value, even priceless. Some companies have made considerable profits by leveraging the value of their trademarks. According to trademark evaluation results published by some foreign trademark value evaluation agencies, the value of the Coca-Cola trademark reached more than 70 billion US dollars twenty years ago, and the value of the McDonald's trademark also reached 25 billion US dollars. The value of the trademarks of these world-renowned companies far exceeds the value of their tangible assets.
Trademarks embody the comprehensive strength of an enterprise, especially its market competitiveness. It can drive the economic development of an enterprise, a region or even a country. From a national level, Microsoft, Coca-Cola, General Motors, Wal-Mart, etc. have supported the U.S. economy, Mercedes-Benz, BMW, Siemens, etc. have supported the German economy, and Toyota, Sony, Panasonic, etc. have revitalized the Japanese economy. The number of well-known trademarks owned by a country also reflects the country's economic development level and comprehensive strength, and shows the country's economic status in the international community.
From a business perspective, trademarks carry the corporate image and condense the corporate goodwill. According to statistics, the world's well-known trademark products account for less than 3% of the product categories, but they have 50% of the global market. In the era of knowledge economy, this market share will continue to rise. A good trademark can help companies continuously expand market sales, gradually increase the market share of products, and then obtain high market returns. In the era of knowledge economy, if a company has a world-class well-known trademark, it can occupy the commanding heights of the market in its field.
Author: Cai Fangfang Sanju Sunshine Intellectual Property Group Han Xingqian Beijing Yiju Law Firm
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