Amazon cannot use its “AWS” logo in China


Palak Arora 14/01/21 #copyright #patent #trademarks #infringement #trending #blogging #intellectualproperty #IPR #IPRinfo #IPlaw #IPRrights #Trademarkclickcom #IP #lawfirms #lawyers #legalmarketing #entrepreneur #IPRBlog #IPBlog #Amazon #AWS #CloudComputing #ActionSoft #China

Amazon Inc. was decreed not to use its AWS logo in China. This logo is associated with Amazon’s cloud-computing business in China. Such a decree was passed by a Beijing court gifting a brand new headache for the company which was already hampered by Chinese regulations and rivals. The cloud-computing business of Amazon once displayed its logo in 2018 at an expo that was organized in Shanghai. However, the verdict was passed in the month of May last year but according to China’s practice, it was released in December only. There is a trend in Chinese courts to often publish rulings after months they are being made.

The Beijing Municipal High People’s Court declared the trademark for the term “AWS” belonged to ActionSoft Science & Technology Development Co. It is a Chinese software and data services company. One can see this ruling being in favor of local companies. Chinese court didn’t stop here and even ordered Amazon to stop using the term AWS or any kind of similar logos anywhere in China. Amazon was also directed to pay compensation to ActionSoft of the total approximate amount of 76.5 million yuan which is equivalent to $11.8 million.

"Amazon was the first to use the AWS logo in China to sell cloud services by many years," a spokesperson for the company said. "We strongly disagree with the court's ruling and have appealed the case to the Supreme People's Court." The term AWS in dispute stands for “Amazon Web Services”. Even after such a harsh ruling Amazon’s cloud-computing service website is still being used frequently in China. Since no one can ignore the rulings of a court a note at the bottom of its main webpage has been added which clearly says “AWS is used as an abbreviation and is not displayed herein as a trademark.”

It didn’t come to the notice immediately on the fact whether it was Amazon who appealed to the Supreme People’s Court? Supreme People’s Court is the highest court in China. There is a Chinese lay which states: “When an appeal is submitted, the lower court’s decision generally doesn’t take legal effect until the higher court reaches a decision.”  Amazon is somehow, a relatively small player in China’s cloud market. This market of China is dominated by plenty of local rivals. Undoubtedly, the verdict is a big headache for the U.S. Company but lawyers of the company have medicine to this headache. And this medicine is using a new different trademark in the Chinese Cloud market. This will help them in continuous business. However, the company has to put a coma on their business till the time they come up with a different trademark.

On the other hand, China’s official trademark database showed that the ActionSoft registered AWS as a trademark for the working of its cloud-computing services in China in the year 2004 and Amazon registered AWS with the virtual depiction of a smile in 2012. However, both companies have filed a series of applications over the years so as to register their versions of AWS under various categories of business. China’s trademark regulator overturned some of Amazon’s attempts in September 2013. It was a result of conflicts with ActionSoft’s registrations according to the court filing.

ActionSoft sued Amazon and its local joint-venture partner in July 2018 making allegations such as trademark infringement and even sought compensation which was approximately $46 million. Amazon argued in its rescue that it started to use and promote AWS as its cloud-computing service brand as early as 2002.

It seems like China has become a great problem for everyone while getting their IP registered as several companies and celebrities ranging from top notches like Apple Inc. to basketball star Michael Jordan have been seen fighting with Chinese companies over trademark and naming rights for several years. It has been observed in some cases that local companies squat on trademarks of foreign brands with the main aim that brands would prefer to settle instead of facing lengthy litigations.

There are many other instances where big companies paid compensation to settle the matters such as a case where Apple paid exactly $60 million in 2012 for settling an iPad trademark dispute in China so that it could continue selling the portable device in the country. Other instances include Mr. Jordan, Facebook Inc., and Starbucks Corp. where they managed to bag victories over such tactics of Chinese companies using their names that too in Chinese characters.

The Chinese Government has the rule to limit foreign ownership of certain cloud-service providers due to which Amazon decided to partner with local companies. However, AWS maintained its fifth position being the biggest cloud provider in China throughout the first half of 2020 with a market share of 7.2%. It also trailed other service providers such as Alibaba Group Holding Ltd, Tencent Holdings Ltd, Huawei Technologies Co., and China Telecom Corp. All of these held together with a nearly 70% share in China’s cloud infrastructure service as well as platform service markets.

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