Beijing court rules Apple violated patent law

Apple suffered another legal setback in China where officials in Beijing slapped the company with a patent violation on some iPhone models, ruling in favor of a small local rival.

Apple was quick to downplay the ruling, saying an appeal had already been lodged, allowing the phones to stay on the market in the Chinese capital pending the outcome.

Still, the decision is another sign that Chinese officials are scrutinizing the company more closely and comes as Apple, already grappling with slowing iPhone sales, prepares to roll out the next version of its iconic smartphone. China shut down Apple’s book and movie service in April for violating foreign publishing regulations, and last month a Beijing court ruled that a little-known accessories maker could use the iPhone label for a range of wallets and purses. Billionaire Carl Icahn said in April he sold out of his position in Apple because of concerns about the company’s relationship with China.

In the face of such obstacles, Apple has made efforts to remain on good terms with the Chinese government, including a visit by CEO Tim Cook in May during which he announced a $1 billion investment in China’s car-sharing service Didi Chuxing Technology. In 2013, Cook apologized after state media accused Apple of poor customer service and inadequate warranties.

Beijing’s Intellectual Property Office said the iPhone 6 and iPhone 6 Plus infringe on patent rights held by the company Shenzhen Baili because of similarities to its 100C phone, according to its ruling Friday. China’s largest smartphone makers, by unit shipments, were Huawei Technologies, Oppo and Vivo in the first quarter, with Lenovo Group and Xiaomi close behind, according to research firm International Data Corporation.

While the decision covers only Beijing, future lawsuits against Apple could take the case as a precedent, potentially influencing the outcomes of litigation elsewhere in China. Baili is one of scores of smartphone brands trying to cash in on the country’s mobile boom. Xu Guoxiang, the inventor who holds the patent and listed as a Baili representative on yellow-pages site czvv.com, did not answer calls seeking comment.

“IPhone 6 and iPhone 6 Plus as well as iPhone 6s, iPhone 6s Plus and iPhone SE models are all available for sale today in China,” Apple spokeswoman Kristin Huguet said in an e-mailed statement. “We appealed an administrative order from a regional patent tribunal in Beijing last month and as a result the order has been stayed pending review by the Beijing IP Court.”

Bloomberg