Apple Faces $1.4 Billion Lawsuit by Chinese AI Firm in Siri Patent Fight -- 2nd Update
August 03 2020 - 1:11PM
Dow Jones News
By Liza Lin
A Shanghai company that was recently awarded a Chinese patent
for a voice assistant similar to Apple Inc.'s Siri has filed a
patent-infringement lawsuit against Apple that, if successful,
could prevent the American tech giant from selling many of its
products in its most important market outside the U.S.
Shanghai Zhizhen Network Technology Co. said Monday that it is
suing Apple for an estimated 10 billion yuan ($1.43 billion) in
damages in a Shanghai court, alleging the iPhone and iPad maker's
products violated a patent the Chinese artificial-intelligence
company owns for a virtual assistant whose technical architecture
is similar to Siri's.
Siri, a voice-activated function in Apple's smartphones and
laptops, enables users to dictate text messages or set alarms on
their devices.
As part of the suit, Shanghai Zhizhen, also known as Xiao-i,
asked Apple to stop sales, production and the use of products
flouting the patent -- a category that includes virtually all the
U.S. company's devices.
Apple said it was disappointed Xiao-i filed the lawsuit, adding
that Siri doesn't contain features included in the Chinese
company's patent, which relates to games and instant messaging.
"We look forward to presenting the facts to the court and we
will continue to focus on delivering the best products and services
in the world to our customers," Apple said in a statement.
China's Supreme Court ruled in late June that Shanghai Zhizhen
owns the patent for the virtual assistant in China. The decision
ended an eight-year-long legal battle between the two companies in
Chinese courts. Siri was introduced as an iPhone feature in 2011,
and Shanghai Zhizhen sued Apple the following year.
If Shanghai Zhizhen applies for a preliminary injunction, the
court could decide to bar Apple from selling products loaded with
Siri in China for the duration of the trial, said Fang Jianwei, a
former Chinese judge who is now a litigation partner at Zhong Lun
Law Firm in Shanghai.
However, Mr. Fang said such injunctions have to meet strict
conditions and are rarely granted by Chinese courts. And the
patent-infringement suit isn't a surefire win for Shanghai Zhizhen,
he added. While the Supreme Court ruled that the Chinese company's
patent is valid, the current court could still find that the
underlying technology behind Siri and Shanghai Zhizhen's patent is
different enough to rule in favor of Apple.
China is second only to Apple's home market in terms of sales
for the American brand. Apple boasts considerable cachet in China
but has recently faced more competition from domestic device makers
including Huawei Technologies Co., which surpassed Apple to become
the world's top seller of smartphones in the second quarter of the
year.
Apple said last week that its quarterly sales in China rose
slightly to $9.33 billion, accounting for roughly 16% of its
overall revenue for the three months ended June 27. Bolstering
results were discounts on its iPhone 11 models and China's earlier
recovery from the new coronavirus compared with the rest of the
world.
Conflicts over intellectual property, technology and trade are
driving bilateral relations between the U.S. and China to their
lowest point in decades. Most recently, President Trump threatened
to ban Chinese short-video app TikTok on national-security grounds.
U.S. officials have been involved in talks over a potential sale of
TikTok's American business to Microsoft Corp.
Apple has faced three lawsuits over intellectual property in
China since 2012, when it agreed to pay $60 million to settle a
trademark dispute with the mainland Chinese unit of another
company, Proview International Holdings Ltd., which claimed
ownership of the "iPad" name in China.
Apple lost another trademark battle four years later when a
Beijing court ruled in favor of a Chinese company, Beijing Xintong
Tiandi Technology Co., that made handbags, smartphone cases and
other leather goods under the label "IPHONE."
Raffaele Huang contributed to this article.
Write to Liza Lin at Liza.Lin@wsj.com
(END) Dow Jones Newswires
August 03, 2020 12:56 ET (16:56 GMT)
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