Apple Defeated In Chinese Patent Dispute

By Victor Thomson , Jun 21, 2016 05:40 AM EDT

Last week, the Beijing Intellectual Property Office ruled that some of the Apple devices violate the design patents of Chinese smartphone company Shenzhen Baili.

According to the Wall Street Journal, Beijing is increasing its harassment of the U.S. tech giant. The sales of iPhone 6 and 6 Plus are banned in Beijing after a municipal tribunal's injunction last month was made public late last week.

According to Bloomberg, fast-rising local rivals are becoming bolder in their initiatives of taking on the largest tech company in the world. The iPhone maker could face a rising tide of lawsuits if the ruling creates a precedent. Apple Inc.'s loss in the Chinese patent dispute may indicate more legal trouble ahead.

Apple already faces a slowing economy and aggressive rivals in China, its biggest market outside the U.S. The ruling is the latest challenge for Apple in a country where the patent and intellectual property laws are murky. Chinese courts have already ruled against Apple over the name of some of its iconic products such as the iPhone.

Baili is just one of many Chinese smartphone brands trying to cash in on the country's mobile boom. James Yan, Beijing-based research director at Counterpoint, said that Chinese companies build up their intellectual property through research and development and in this context legitimate lawsuits are on the rise.

Yan added that Chinese smartphone makers have becoming able to somehow fight against industry giants. Since Apple is not willing to publicly lose an intellectual property case in China, its best option is to offer settlement fees.

In a public statement, Kristin Huguet, an Apple spokeswoman, said last week that the company had appealed the ruling. On its turn, Apple aggressively defends its technology patents. There are a series of lawsuits against rival Samsung across four continents.

The loss of the Chinese patent lawsuit comes as Apple prepares to roll out the next version of its iconic iPhone device. This is just another sign that Chinese officials are scrutinizing the company more closely. 

In April, China shut Apple's book and movie services. A Beijing court ruled last month that a Chinese accessories maker could use the IPHONE label for a range of purses and wallets.

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