Amazon Banned From Using AWS Logo in China Trademark Ruling -- Update
06 January 2021 - 2:03PM
Dow Jones News
By Yang Jie
Amazon.com Inc. can't use its cloud-computing business's AWS
logo in China, a Beijing court ruled, the latest headache for a
company that has already been hampered by Chinese regulations and
rivals.
The Beijing Municipal High People's Court ruled that the
trademark for the term "AWS" belonged to ActionSoft Science &
Technology Development Co., a Chinese software and data services
company, according to a court verdict published Dec. 30.
The court ordered Amazon to stop using the term AWS or any
similar logos in China and pay compensation of 76.5 million yuan,
equivalent to $11.8 million, to ActionSoft. The verdict was dated
May 2020 but was released at the end of last month. Chinese courts
often publish rulings months after they are made.
An Amazon representative said: "Amazon was the first to use the
AWS logo in China to sell cloud services by many years. We strongly
disagree with the court's ruling and have appealed the case to the
Supreme People's Court."
Beijing-based ActionSoft didn't reply to a request for
comment.
On Amazon's cloud-computing service website in China, the term
AWS, which stands for Amazon Web Services, was still frequently
used as of Tuesday. A note at the bottom of its main webpage said
AWS is used as an abbreviation and "is not displayed herein as a
trademark."
The Supreme People's Court is China's highest court. When an
appeal is submitted, the lower court's decision generally doesn't
take legal effect until the higher court reaches a decision,
lawyers familiar with Chinese law said.
Amazon is a relatively small player in China's cloud market,
which is dominated by local rivals. Although the verdict is a
headache for the U.S. company, the lawyers said it is unlikely to
bring Amazon's cloud business in China to a halt, because the
company can expect to be able to continue its business by using a
different trademark.
ActionSoft registered AWS as a trademark for its cloud-computing
services in China in 2004, while Amazon registered AWS with the
smile logo in 2012, according to China's official trademark
database.
Over the years, both companies have filed a series of
applications to register their versions of AWS under various
business categories. In September 2013, China's trademark regulator
overturned some of Amazon's attempts, citing conflicts with
ActionSoft's registrations, according to the court filing.
In July 2018, ActionSoft sued Amazon and its local joint-venture
partner, alleging trademark infringement and seeking compensation
of approximately $46 million. Amazon argued that it started to use
and promote AWS as its cloud-computing service brand as early as
2002, according to the court filing.
For years, companies and celebrities ranging from Apple Inc. to
basketball star Michael Jordan have fought with Chinese companies
over trademark and naming rights. In some cases, local companies
have squatted on foreign brands' trademarks in anticipation that
brands would rather settle than face lengthy litigation.
In 2012, Apple paid $60 million to settle an iPad trademark
dispute in China so that it could continue to sell the portable
device in the country. Mr. Jordan, Facebook Inc. and Starbucks
Corp. each claimed legal victories over Chinese companies using
their names in Chinese characters.
In China, Amazon partners with local companies because the
government limits foreign ownership of certain cloud-service
providers.
In the first half of 2020, AWS was the fifth-biggest cloud
provider in China with a market share of 7.2%, according to
research firm IDC. It trailed Alibaba Group Holding Ltd., Tencent
Holdings Ltd., Huawei Technologies Co. and China Telecom Corp.,
which together held a nearly 70% share in China's cloud
infrastructure-as-a-service and platform-as-a-service markets.
(END) Dow Jones Newswires
January 05, 2021 21:48 ET (02:48 GMT)
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