A Rotten 'Apple' in China? Problems for Apple Inc.

Apple has lost a trademark battle in China which will result in a company which sells leather goods, including handbags and phone cases, being able to continue to use the name "iPhone" on or in connection with their products. Background and Decisions

Xintong Tiandi filed a trademark application in China in 2007 and was subsequently granted a trademark for "IPHONE" in respect of leather products in 2010.  Apple had previously filed a trademark for the name in respect of electronic goods in 2002, but it was not approved until 2013.

Xintong Tiandi sells handbags, mobile phone cases and other leather goods branded with the name "IPHONE" and the "R" registered trademark symbol.

Apple first brought the case against the company to the Chinese trademark authority in 2012.  When that case failed, Apple filed a lawsuit in a lower Beijing court. But the lower court also ruled against Apple, so it appealed to a higher court, the Beijing Municipal High People's Court.

Apple iPhones first went on sale in China in 2009.  The higher court ruled in favour of Xintong Tiandi ruling that Apple could not prove it was a well-known brand in China before Xintong Tiandi filed its trademark application in 2007.

Rotten 'Apple' in China

China is the second biggest market for Apple products but recent news regarding Apple business in the country has not been good.

Apple's latest quarterly report which showed a 13% drop in revenue on slower iPhone sales. In China in particular, sales of the iPhone had fallen by 26%.

Apple is also facing difficulties with other operations in China. In March, a law was passed which required all content shown in China to be stored on servers based on the Chinese mainland.  As a result iBooks and iTunes services were shut down in the country.

In a final blow only last week billionaire investor Carl Icahn sold all his shares in Apple citing concerns about the company's prospects in China as the reason for doing so.

It remains to be seen whether this downward trend in sales and business in China will continue or whether it is merely a blip.