Word has spread quickly this week about Apple’s claim that some promotional product suppliers have violated the company’s intellectual property by selling unauthorized chargers containing its 8-pin (aka Lightning) and/or 30-pin connectors.
As distributors, like AIA Corporation, Neenah, Wis., learn about the controversy, they have been ceasing sales of the affected products.
“AIA has become aware of efforts by Apple Inc., to protect its intellectual property rights in certain products, namely an 8-pin and 30-pin connection system,” Tom Lehr, AIA’s chief financial officer said in an e-mail to its members yesterday. “Apple’s actions have come in the form of a letter sent to suppliers, requesting, amongst other things, that the supplier stop offering for sale the infringing products, [reveal] the identity and locations of manufacturers of the infringing products, and [provide] details of the supplier’s sales of all infringing products.”
Lehr went on to note that AIA did not receive the cease-and-desist letter directly, nor has a supplier or manufacturer contacted the company regarding the letter. While The Image Group did not receive the letter either, suppliers in its preferred network have emailed the company about discontinued products as a result of the letter’s requests, Bruce Felber, director of marketing and sales support for The Image Group, Holland, Ohio, said.
“From time to time, The Image Group learns of potential infringement concerns related to items available through the promotional products industry,” Felber said. “Whenever news of possible industry-wide infringement issues reaches us, The Image Group immediately discontinues selling all affected items to our customers.”
Mike Emhoff, CEO of Shumsky, Dayton, Ohio, reached out to his PeerNet supplier partners to learn which items, if any, were affected from each supplier.
“When we first learned about the unauthorized Apple accessories this week, we immediately went through our system to make sure we did not have any open orders or were featuring any of these types of items on any of our sites,” said Amy Sheldon, Shumsky’s head of strategic partnership and global compliance. “We also notified our sales team and staff not to quote these items unless they had documentation that the item was MFi-certified.”
MFi, which stands for “Made for iPod,” “Made for iPhone” or “Made for iPad,” is Apple’s licensing program that indicates whether a product is authorized. To be able to utilize the MFi logos and have an authorized lightning or 30-pin charger, among other products that use Apple’s licensed components, a company must join Apple’s MFi program. However, if that company does not own a manufacturing facility—which many promotional suppliers do not—it is not eligible to join the MFi program.
But that doesn’t mean there aren’t any Apple product chargers that are safe in the promotional product industry.
“Yes, [there are authorized Apple chargers], but the only ones we have been informed of so far are for retail brand named products like Zoom and IDAPT,” Sheldon said. “I have reached out to several suppliers and I have not found anyone yet that carries an authorized accessory that is not a retail brand.”
The number of unauthorized chargers in the industry is unknown, but suppliers are discontinuing affected products while distributors are stopping sales on those same products, so the cease-and desist letter from Apple is just that, at least for now.
“It’s really up to the suppliers to see how they want to respond,” Lisa A. Lori, an intellectual property attorney with Philadelphia-based Klehr Harrison Harvey Branzburg LLP, said of the cease-and-desist order. “Legally, they don’t have to do anything.”
If suppliers keep selling unauthorized chargers, Apple could sue. An Apple win could result in a court order to stop selling unauthorized chargers, significant legal fees and a large monetary judgment.
“If that ever went to court and [suppliers] ignore [the cease-and-desist letter], Apple could show willful conduct,” Lori said, noting that those who have not yet received a letter could still be liable.
Providing sale details and manufacturers’ identities could be damaging to suppliers as well as to manufacturers and distributors, she added.
“If the suppliers comply with this letter and give them what they’re looking for, that doesn’t mean they’re not going to sue,” she said. “…If Apple gets that information [from suppliers], they’re going to find out who the distributors are, and [distributors are] going to get that letter.”
Now in addition to seeking safety and compliance in products, distributors should ensure MFi certification is available for applicable products, Sheldon said.
“We have always trusted that the items being offered are not only safe but are sold to us without any legal ramifications,” she said. “To ensure an item is safe we ask for testing documentation. Now we will be asking for MFi certifications and information to reassure us that they are allowed to sell the item if it looks like one produced by someone else or found in retail. It definitely makes it more challenging to source and sell.”
