Unlike Apple (which lost a big trademark case) and Under Armour (which had to contend with an annoying trademark copycat), Facebook had a pretty good week in China. In a case decided in late April (but not publicized until last week), the Beijing High People’s Court invalidated Zhongshan Pearl River Beverages’ three trademark registrations for “face book” and sent them back to the Trademark Review and Adjudication Board (TRAB) for reconsideration.
Many of the news stories I’ve read about this case characterize it as a sign that Facebook’s charm offensive may be working—in sharp contrast to Apple’s recent travails, which portend poorly for Apple’s future in China. I find this narrative a bit facile. I think both the Apple and Facebook cases were decided correctly according to Chinese trademark law, and the analysis doesn’t need to go any further. It’s convenient to put a political spin on the outcomes, but it’s hardly necessary.
Apple lost its case because Xintong Tiandi Technology submitted a trademark application for IPHONE just a few months after Apple announced the iPhone in San Francisco, and years before the iPhone went on the market in China. Apple was unable to provide sufficient evidence to the court that IPHONE was a well-known brand at the time of the application, which is why Apple lost.
In contrast, Zhongshan Pearl River’s applications for “face book” was submitted on Jan. 24, 2011. (To be precise, the applications were submitted by Liu Hongqun, the company’s marketing director.) By 2011, Facebook had been widely covered in the Chinese media for years; it wasn’t even blocked in China until 2009. Moreover, the Beijing High Court deemed Liu Hongqun a trademark squatter, noting that he had previously attempted to register trademarks for other famous brands such as 黑人, the alarmingly racist toothpaste that you can still find in stores all over Asia. In other words, the court wasn’t inclined to give Liu the benefit of the doubt, and it had enough evidence to find that Facebook was a well known mark at the time of Liu Hongqun’s application.
I also would be reluctant to call the Facebook trademark decision a harbinger of better IP protection for non-Chinese brands. Facebook is a huge, powerful company, and it was quite well-known even back in 2011. How many other companies are as big as Facebook? Still, one lesson should be clear from this: if your brand is at all famous and you have the means, strongly consider the Starbucks approach and register your brand in all 45 classes. I haven’t talked to anyone at Facebook about it, but I am certain they would have gladly paid extra costs upfront to avoid the hassle and cost of having to litigate this case.
It’s also worth remembering that Apple has earned, and is still earning, billions of dollars every year in China. Facebook still isn’t allowed to operate there. So tell me again, how is Facebook coming out ahead here?