INTERNET: Facebook Makes Name in China with Trademark Win

By on

Bottom line: A favorable court ruling in a trademark dispute is the latest positive step for Facebook in China, and reinforces a view that it could get permission to open a Chinese service within the next year.

Facebook wins trademark ruling in Beijing

Social networking giant Facebook (Nasdaq: FB) may be absent on the China Internet, but a new victory in a local trademark dispute shows its name is gaining traction in the Chinese legal system. Some are pointing out that Facebook’s victory against a beverage maker that tried to register its trademark contrasts sharply with the loss in a similar case last week for US smartphone giant Apple (Nasdaq: AAPL). (previous post)

While both decisions came from courts in Beijing, it’s probably a bit unfair to compare the 2 since each has to be considered based on individual facts and evidence. But this latest trademark victory does appear to show that Facebook founder Mark Zuckerberg’s strategy of currying favor with Beijing may be producing results, as he pursues his ultimate goal of launching a Chinese version of his social networking service (SNS).

According to the latest reports, the Beijing court ruled against Zhong Shan Pearl River Drinks, which filed a 2011 application to use the “face book” name on its beverages. (English article) The court said the trademark application was an obvious act of copying and harmed fair market competition. Facebook had previously complained about the registration to the government body that oversees trademarks, but failed to get a resolution in its favor and took the matter to court.

The court’s decision does seem a bit strange, since the judge could have easily said that Facebook wasn’t doing business in China in 2011 when Zhong Shan Pearl registered the trademark. Therefore, it would be difficult for Facebook to say its name was already well-known in the country, which is often an argument made in this kind of situation. Apple made a similar argument in its case, and the judge ruled against it because it said the iPhone trademark wasn’t well known in China when a leather goods maker registered the name in 2007.

While the ruling against Apple looks slightly ominous, the opposite is probably true for Facebook, whose site has been blocked in China since 2009 because it contains user-generated content that is sensitive to Beijing. Despite that fact, Zuckerberg has said on numerous occasions that he wants to open a Chinese version of his site, and frequently travels to China to attend state-sponsored events and meet with government officials.

Courting China at Home

Zuckerberg’s China offensive is also quite active on his home turf in the US. In the past he invited one of China’s top Internet officials to visit the Facebook campus in California, and he was also present at 2 events attended by Chinese President Xi Jinping during a state visit to the US last year. His presence at those meeting was almost certainly approved by Chinese officials, and was even slightly strange since Facebook doesn’t have any major presence in China.

The company does have an office in Beijing, which it set up in 2014 to sell advertising to Chinese clients for its global site. Reports around 5 years ago had indicated that Facebook might be near a deal to form a China joint venture that would allow it to launch a separate Chinese site with a local partner. But no announcement ever came, and since then the government has become more strict about Internet oversight.

All that said, this courtroom victory does look significant on a symbolic level. That’s because the judge probably would have been reluctant to rule in Facebook’s favor if he or she believed the company was on Beijing’s black list. Thus this kind of positive ruling, while apparently justified by the law, also may show that the judge believes that Facebook has earned enough political goodwill to get such treatment.

The bigger question, of course, is whether this kind of friendly signal indicates that Zuckerberg might be closer to his goal of getting Facebook the official green light to finally launch a China site. I’ve previously said that the positive signals appear to be getting stronger and the company could finally get such permission as soon as this year, and this latest decision seems to reinforce that view.

Related posts:

(NOT FOR REPUBLICATION)

(Visited 98 times, 1 visits today)