China IPR

IP Suits Continue to Pursue Apple

by Jae Zhou with the assistance of Mark Cohen

Before their iPad trademark dispute was even settled in July of last year, Apple was confronted with another IP related dispute in China. On June 21, 2012, Shanghai Zhi Zhen, an Internet Technology company brought a claim of invention patent infringement against Siri, the voice-activated personal assistant feature available on iPad and iPhones. Shanghai No. 1 Intermediate People’s Court held a pre-trial hearing on the case on March 27, 2013 and the trial date has been set for July 2, 2013.

According to reports by Sina, the patent application for Xiaoi, a robotic system developed by Zhi Zhen, was filed in 2004 and became effective in 2006 (ZL200410053749.4). Xiaoi, a chat based robotic response system, has been operating on a module similar to Siri before 2007 and has been officially used by Government and Enterprises as a robotic client service system since 2007. The claim alleges that Siri, which began as a chat based robotic response system, was not registered in China until 2007, (ZL200410053749.9). At the time, the title of the patent was “A chat robot system”. Apple purchased Siri in 2010 for a rumored $200 million, and then partnered with Nuance, a voice detection company to develop the Siri feature as it functions now.

Zhi Zhen has not made any demand for monetary compensation, but the company is asking that Apple either remove the Siri feature on all iPhones and iPads sold in China or to stop sale of these products altogether.  Apple’s first quarter earnings in 2013 reveals that the Greater China’s quarterly revenue was 6.8 Billion USD, a 67% increase compared with $4.08 billion in the same period last year, a much higher rate than its worldwide growth.  Without knowing more about the claims, it is hard to judge whether there was a lapse in due diligence by Apple, as the Chinese media seems to suggest, or this is an opportunistic patentee piggybacking on Apple’s iPad battles, or this is simply an honest patent dispute.  One thing is clear: success in China attracts IP litigation – Apple has also had copyright disputes over its iTunes store. As patent filings and growth in IP litigation continue to outstrip GDP growth in China, foreign companies may need to commit disproportionately more resources in China, particularly if they are anticipating success in a crowded technology or product market.

In the meantime, Apple has filed an invalidation claim with SIPO.

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