Will This Court’s Ruling Silence Apple’s Siri in China?
Apple’s (NASDAQ:AAPL) bid to get a Chinese company’s patent on a voice-recognition software invalidated has been rejected by a court in Beijing, reports the country’s official Xinhua news agency via thePeople’s Daily. The ruling could jeopardize Apple’s ability to offer Siri — the iPhone maker’s voice-activated personal assistant — in one of the world’s most important smartphone markets.
As noted by Xinhua, the case originated in 2012, when Shanghai Zhizhen Network Technology filed a lawsuit against Apple in a Shanghai court that alleged that the voice-recognition software used by Siri infringed on its patented “Xiao i Robot” software. After that court announced that it would continue the case at an unspecified future date, Apple filed its own lawsuit against China’s State Intellectual Property Office in Beijing’s Number One Intermediate People’s Court that sought to get Zhizhen’s patent declared invalid. However, the court’s recent ruling upheld Zhizhen’s patent, leaving Apple open to continued litigation over its use of Siri in the country.
Zhizhen’s claim of infringement is based on a patent titled, “Chat robot system” that was filed in 2004 and granted in 2006, according to the State Intellectual Property Office. On the other hand, the technology behind Siri was originally developed by a startup in 2007 that was acquired by Apple in 2010. Siri — which made its debut on the iPhone 4S in 2011 — was a major selling point for the device when it was first released. However, since then several other companies have developed their own personal digital assistants, such as Google’s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google Now and Microsoft’s (NASDAQ:MSFT) Cortana. Although Xiao i Robot started as a chat bot for MSN, Yahoo (NASDAQ:YHOO) Messenger, and other networks, it later evolved into a voice-activated personal assistant app that is available on both the iOS and Android platforms.
Per the abstract for Zhizhen’s “Chat robot system” patent, “The invention discloses a chatting robot system, which comprises at least a user (1), and a chatting robot (9) with a communication module (21), an AI server (3), a query server (4), a game server (5), and corresponding database; wherein, the user has a variety of dialog to the said robot by real time communication platform or SMS platform, and the chatting robot has some AI and powerful information service function.”
As previously reported by Xinhua, Zhizhen noted that Xiao i Robot can intelligently respond to users’ queries by using a series of artificial intelligence servers and databases. Apple’s Siri intelligently responds to users’ natural language queries in a similar way, according to Zhizhen’s complaint. However, Apple claimed that Siri uses a process that does not violate Zhizhen’s patent.
“Unfortunately, we were not aware of Zhizhen’s patent before we introduced Siri (speech recognition technology) and we do not believe we are using this patent,” a Beijing-based Apple spokesperson told Reuters. “While a separate court considers this question, we remain open to reasonable discussions with Zhizhen.” According to Xinhua, Apple also said it would appeal the case to the Beijing Higher People’s Court.
Although Zhizhen is seeking to stop the sale of products with the Siri technology in China, the secretary-general of the China Mobile Internet Industry Alliance previously suggested that the dispute would likely be resolved with a financial settlement out of court, rather than a ban on Siri, according to Xinhua. If Apple does end up paying Zhizhen for the right to use Siri in China, it would not be the first time that the Cupertino-based company has resolved a patent dispute in the country with a payout. As noted by Xinhua, Apple previously paid Proview Technology about $60 million in order to settle a dispute over the iPad trademark in China.
With China set to surpass North America as the world’s largest mobile phone market by revenue this year — according to market research firm Strategy Analytics — Apple cannot afford to lose such an important market. Apple reported an all-time quarterly revenue record of almost $10 billion in Greater China during the March quarter and CEO Tim Cook noted that it was the company’s fastest growing region.
“[W]e literally did well in every single area in China,” said Cook according to a second quarter of fiscal 2014 earnings call transcript provided by Seeking Alpha. In this sense, a onetime financial settlement that keeps Siri talking in China may be small price for Apple to pay to keep its products for sale in the country.
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