Repair shop loses legal battle with Apple over 'counterfeit' iPhone screen import
In the conclusion of a two-year back-and-forth legal battle, an independent repair shop in Norway has lost an appeal over the import so-called "counterfeit" Apple iPhone screens.
Apple's iPhone 6s lineup at launch
In a ruling passed down on Thursday, an appeals court affirmed a judgement over independent repair shop owner Henrik Huseby. Huseby is now on the hook for not just destroying what Apple calls "counterfeit" iPhone screens he bought from China, but also for Apple's legal costs of about $26,000.
Huseby owns a small electronics repair shop called PCKompaniet in Norway. To supply parts for that business, he ordered a shipment of 63 iPhone 6 and iPhone 6s replacement screens from Asia, which were seized by Norwegian customs agents in July 2017
Following the Norwegian government informing Apple, the company had a lawyer represented the company propose a settlement. This settlement, as pitched, entailed Huseby paying $3,500, destroying the screens, and promising to no longer sell or deal with any products that infringe Apple's trademarks.
Huseby refused the settlement and took Apple to court. The case hinged on the question of how exactly Huseby obtained the Chinese parts, and how they were marked.
The phone screens in question were Apple parts, refurbished by Chinese resellers, but with the branding obscured. Reports vary whether the branding were completely obliterated, or just marked over with a permanent marker.
Huseby's legal team said that the obfuscation of the label removed them from Apple's control. They reasoned that any branding would be invisible to the consumer, and since there was no possibility that they could be confused with "official" screens, and as Huseby would not be representing them as "official" screens supported by Apple they were not "counterfeit" in any way,
The first ruling on the matter led to a win for Huseby. However, Apple appealed, and won a verdict of the destruction, plus payment of Apple's legal costs of about $12,000.
"We're sending strength and moral support to Henrik Huseby today," Advocacy group Right to Repair Europe said in a statement to The Register. "He took a stand where other businesses were afraid to, and he will pay a heavy price."
Apple has frequently cracked down on suspected counterfeiters, including the seizure of more than $1 million in fake accessories from a London warehouse in 2017 and general warnings about third party and counterfeit power accessories. It's even gone after counterfeit accessories for sale on Amazon.
Apple has also historically opposed "Right to Repair" laws, which have been proposed in 20 U.S. states.
Apple's iPhone 6s lineup at launch
In a ruling passed down on Thursday, an appeals court affirmed a judgement over independent repair shop owner Henrik Huseby. Huseby is now on the hook for not just destroying what Apple calls "counterfeit" iPhone screens he bought from China, but also for Apple's legal costs of about $26,000.
Huseby owns a small electronics repair shop called PCKompaniet in Norway. To supply parts for that business, he ordered a shipment of 63 iPhone 6 and iPhone 6s replacement screens from Asia, which were seized by Norwegian customs agents in July 2017
Following the Norwegian government informing Apple, the company had a lawyer represented the company propose a settlement. This settlement, as pitched, entailed Huseby paying $3,500, destroying the screens, and promising to no longer sell or deal with any products that infringe Apple's trademarks.
Huseby refused the settlement and took Apple to court. The case hinged on the question of how exactly Huseby obtained the Chinese parts, and how they were marked.
The phone screens in question were Apple parts, refurbished by Chinese resellers, but with the branding obscured. Reports vary whether the branding were completely obliterated, or just marked over with a permanent marker.
Huseby's legal team said that the obfuscation of the label removed them from Apple's control. They reasoned that any branding would be invisible to the consumer, and since there was no possibility that they could be confused with "official" screens, and as Huseby would not be representing them as "official" screens supported by Apple they were not "counterfeit" in any way,
The first ruling on the matter led to a win for Huseby. However, Apple appealed, and won a verdict of the destruction, plus payment of Apple's legal costs of about $12,000.
"We're sending strength and moral support to Henrik Huseby today," Advocacy group Right to Repair Europe said in a statement to The Register. "He took a stand where other businesses were afraid to, and he will pay a heavy price."
Apple has frequently cracked down on suspected counterfeiters, including the seizure of more than $1 million in fake accessories from a London warehouse in 2017 and general warnings about third party and counterfeit power accessories. It's even gone after counterfeit accessories for sale on Amazon.
Apple has also historically opposed "Right to Repair" laws, which have been proposed in 20 U.S. states.
Comments
If the US thinks about freedom this way, why don't people have freedom to do what they want with their devices.
Yes, that is the now perennial question between anarchy and an orderly, rule based society that protects people and their property.
And, why would they obscure or remove the Apple branding -- which would, if anything, add value.
This is all about consumer protection, not right to repair. I'm really surprised that individuals and organizations that position themselves as consumer advocates would take up the cause of someone who is violating a core tenet that protects consumers, that being that you get what you pay for in a legal transaction. It's like saying "I'm totally against crime," but if buying stolen property saves me some serious cheddar, then saying "I can look the other way." Can't have it both ways.
Also, there is Apple pretending to be a “green” company, and then takes action against refurbished repair parts, while squashing a small shop with an onslaught of lawyers.
Given that the guy won in the first go around, it’s likely fair to say, that Apple’s high-priced lawyers out argued whatever small lawyer the guy could afford; had he had the funds to use some legal top guns, chances are, he would have prevailed.
I've used Apple products for decades and have never once had a need or a use to visit any of these repair shops. I couldn't care less if they all closed down tomorrow.
If a repair shop wants to service Apple devices, then either do it by the book or GTFO. They don't get to make their own rules.
a lot of this hinges on security. If you don’t care about that, buy a brand that doesn’t care either. Then you won’t have a problem breaking it when you try to repair it.
It's more than that. One can not re-brand another product, as their own or someone else's. In other words, this repair shop can not re-brand Apple products as some other off brand or their own. This falls under "reverse passing off". Where "passing off" is slapping someone else trademark on another, usually inferior, product, "reversing passing off" is the removal of someone else trademark on a product and passing it off as your own or a no name brand (white label).
Right now, an iPhone 6 LCD assembly cost less than $20 on eBay, but they are not sold as an Apple branded LCD. Even if the company that makes them might be the same company that makes the LCD's for Apple, they are sold as Apple compatible parts. The buyers knows that chances are, these LCD's are not as good as the LCD's made for Apple, with the Apple trademark, but will buy them because they are 1/5 the price of an Apple branded LCD and 1/2 the price of a used Apple branded LCD.
Now suppose this repair shop was able to purchase real Apple branded iPhone 6 LCD's at a great discount, from a grey market source that obscures the Apple trademark to make the transaction less illegal. Even if the repair shop did not advertise that the LCD's they used to repair iPhones were made by Apple, they can not sell them as not being made by Apple, that would be "reverse passing off".
This shop might have been able to charge more for repair work using these screens, than using the non Apple branded eBay LCD's because they are a much higher quality screen and people that knows the difference would be wiling to pay more for their repair work. Even if they were never told that the LCD's are real Apple LCD's. The shop ends up making more profits than if they were to buy and use the eBay LCD's for their repairs. Word of mouth would be that this shop was using Apple quality LCD's for their repair work, at half the price of an Apple branded LCD. Even if the shop were not to mark up the price of the Apple branded LCD's they purchased, (with the Apple trademarked removed), they still benefit from being able to charge more for the repair work with these LCD's, because people are willing to pay more because of what they think are high quality non Apple branded LCD's being used. The shop was taking advantage of Apple quality product, without giving credit to or paying, Apple.
With Apple's screens this is a difficult proposition as it is a complex component where Apple also holds some IP that they won't license to 3rd parties, and the tight specifications of the iPhone usually mean that there aren't many alternative design options.
Naturally a person or business can't be in receipt of stolen or counterfeit goods (and obviously those items can't be sold.)
If the screens are replications of Apple's design then they are counterfeits.
If they're identical to Apple's design but with the branding obviously marked away then there is the issue of stolen goods. While the goods are likely from Apple's factory, they can't be tracked to legitimate sales and disposals, and are now indistinguishable from stolen goods.
Operators of repair stores should always be aware of the source of their parts - they are the essential cog in the rebirthing of stolen parts.
Cases like this actually work in favour of 'Right to Repair' legislation because it demonstrates that criminally driven black markets for Apple components exists on part due to Apple not providing trivial access to parts.