AAPL Apple Inc

By Eva Dou and Daisuke Wakabayashi 

A dispute between Apple Inc. and Chinese regulators broke into the open after Beijing's intellectual property authority said the design of the iPhone 6 and iPhone 6 Plus violated a patent held by a Chinese company.

The ruling illustrates the growing challenges Apple and other technology firms face in a key overseas market as China increasingly flexes its regulatory muscle.

The notice by the Beijing Intellectual Property Bureau ordered Apple to stop sales of both the iPhone 6 and iPhone 6 Plus in the city. Apple said Friday that the order had been stayed while it appeals, and that all of its phones remain available for sale.

In the past year, Apple has come up against demands to comply with new Chinese cybersecurity requirements, content licenses and now a patent case. As China's economic power grows, it is increasingly seeking to set its own rules over key industries such as technology.

It isn't the first time Apple has come under Chinese government scrutiny. As one of the most successful Western brands in the country, Apple has often drawn regulatory attention and lawsuits.

The two iPhone models infringe on a Chinese patent for exterior design held by Shenzhen Baili for its 100C smartphone, the Beijing Intellectual Property Bureau wrote in a statement on its website dated May 19. It wasn't clear when the statement was posted online, but it was noticed earlier this week by Chinese media.

Some mobile-phone stores in the city already had stopped selling the two models months ago, switching to the current iPhone 6s and 6s Plus phones. Apple will soon end production of both the older models, according to a person familiar with the production plans.

A phone operator at the Beijing Intellectual Property Bureau on Friday evening said no one was available to answer queries.

Apple has been battling Shenzhen Baili over the patent for more than a year, according to filings with China's State Intellectual Property Office. The regulator's patent re-examination board upheld Shenzhen Baili's patent on Dec. 2, 2015.

It is the latest challenge for Apple in China, its largest market outside of the U.S. Falling iPhone sales in China was a major factor in Apple posting its first quarterly decline in revenue in 13 years in April. China also shut down Apple's iBooks and iTunes Movies services that month, with regulators telling the company it didn't have the necessary licenses, according to people familiar with the matter.

Apple last month announced a $1 billion investment in Chinese ride-hailing company Didi Chuxing Technology Co., an unusual investment for the company. Analysts said it was likely made in part to curry favor with Beijing, as Apple faces challenges in the country on multiple fronts.

Write to Eva Dou at eva.dou@wsj.com and Daisuke Wakabayashi at Daisuke.Wakabayashi@wsj.com

(END) Dow Jones Newswires

June 17, 2016 11:14 ET (15:14 GMT)

Apple (NASDAQ:AAPL)
Historical Stock Chart
From Mar 2024 to Apr 2024

Apple (NASDAQ:AAPL)
Historical Stock Chart
From Apr 2023 to Apr 2024