Apple’s Patent Foe in China Is Basically Bankrupt

June 23, 2016, 12:21 PM UTC
A woman (L) uses her mobile phone as a security guard looks on outside an Apple store in Shanghai on May 7, 2012. A Chinese computer company which sued Apple over the rights to the iPad trademark in China is now in talks for an out-of-court settlement, a lawyer for the firm said on May 7. AFP PHOTO/Peter PARKS (Photo credit should read PETER PARKS/AFP/Getty Images)
Peter Parks—AFP via Getty Images

The Chinese company suing Apple for infringing on its design patent resembling the iPhone 6 is insolvent. It stopped making phones after collapsing over the past year, it doesn’t pick up its office phone, and it erased its websites, according to the Wall Street Journal.

The company known as Shenzhen Baili Marketing Services Co. won a regulator’s patent ruling in Beijing this month against Apple for its rounded-edge smartphone design, stirring fears that Apple’s iPhone 6 would be shut out of the China market. (CNBC ran the headline, “Beijing bans iPhone 6, saying it’s too similar to Chinese phone.”)

But that reaction was hasty. Apple has appealed, allowing it to continue selling iPhone 6s, and the Beijing ruling only applies to Beijing itself.

The Journal notes that Chinese regulators granted Baili’s patent in March 2014 just as leaked photos of the iPhone 6 were appearing online. That’s a common tactic of companies in China—where the intellectual property system is based upon a first-to-file rule—to beat Western companies to the IP office. Tesla, New Balance, and Apple, on a separate occasion last year, have had trademark headaches in China over the same issue.

Apple is expected to get a hearing on its appeal later this year. Until at least then, iPhone 6 sales continue in Beijing.