Apple Sued an Independent iPhone Repair Shop Owner and Lost

Discussion in 'Apple and Mac OS X' started by hmscott, Apr 18, 2018.

  1. hmscott

    hmscott Notebook Nobel Laureate

    Reputations:
    4,476
    Messages:
    15,698
    Likes Received:
    19,305
    Trophy Points:
    931
    Apple Sued an Independent iPhone Repair Shop Owner and Lost
    Apple said an unauthorized repair shop owner in Norway violated its trademark by using aftermarket iPhone parts, but a court decided in favor of the shop owner.
    https://motherboard.vice.com/en_us/...independent-iphone-repair-shop-owner-and-lost

    "Last year, Apple’s lawyers sent Henrik Huseby, the owner of a small electronics repair shop in Norway, a letter demanding that he immediately stop using aftermarket iPhone screens at his repair business and that he pay the company a settlement.

    Norway’s customs officials had seized a shipment of 63 iPhone 6 and 6S replacement screens on their way to Henrik’s shop from Asia and alerted Apple; the company said they were counterfeit.

    In order to avoid being sued, Apple asked Huseby for “copies of invoices, product lists, order forms, payment information, prints from the internet and other relevant material regarding the purchase [of screens], including copies of any correspondence with the supplier … we reserve the right to request further documentation at a later date.”

    The letter, sent by Frank Jorgensen, an attorney at the Njord law firm on behalf of Apple, included a settlement agreement that also notified him the screens would be destroyed. The settlement agreement said that Huseby agrees “not to manufacture, import, sell, market, or otherwise deal with any products that infringe Apple’s trademarks,” and asked required him to pay 27,700 Norwegian Krone ($3,566) to make the problem go away without a trial.

    “Intellectual Property Law is a specialized area of law, and seeking legal advice is in many instances recommended,” Jorgensen wrote in the letter accompanying the settlement agreement. “However, we can inform you that further proceedings and costs can be avoided by settling the case.”

    Huseby decided to fight the case.

    “That’s a letter I would never put my signature on,” Huseby told me in an email. “They threw all kinds of claims against me and told me the laws and acted so friendly and just wanted me to sign the letter so it would all be over. I had a good lawyer that completely understood the problem, did good research, and read the law correctly.”

    [​IMG]
    From the settlement agreement Apple asked Huseby to sign.
    Apple sued him. Local news outlets reported that Apple had five lawyers in the courtroom working on the case, but Huseby won. Apple has appealed the decision to a higher court; the court has not yet decided whether to accept the appeal.

    Why a Norwegian court case should matter to Americans

    The specifics of Huseby’s legal case apply only in Norway, of course, but his case speaks to a problem faced by independent iPhone repair shops around the world. Apple’s use of the legal system and trademark law turns average repair professionals into criminals and helps the company corner the repair market for Apple products.

    In the United States, Apple has worked with the Department of Homeland Security and ICE to seize counterfeit parts in the United States and to raid the shops of independent iPhone repair professionals. ICE’s National Intellectual Property Rights Coordination Center rejected a Freedom of Information Act request I filed in 2016 regarding Apple’s involvement in its “Operation Chain Reaction” anti counterfeiting team, citing that doing so “could reasonably be expected to interfere with enforcement proceedings.” Apple declined to comment for this article.

    “In this case, Apple indirectly proves what they really want,” Per Harald Gjerstad, Huseby’s lawyer, told me in an email. “They want monopoly on repairs so they can keep high prices. And they therefore do not want to sell spare parts to anyone other than ‘to themselves.’”

    Apple makes its own replacement parts available only to Apple Stores and shops in its “Authorized Service Provider” program. By becoming “authorized,” repair companies have to pay Apple a fee (and buy parts from the company at a fixed rate.) They are also restricted from performing certain types of repairs; there are many types of repairs—most commonly ones that require microsoldering for Logic Board damage—that independent companies can do that Apple itself does not do, so there are many reasons why a repair shop might want to remain independent.

    "Huseby is largely dependent on being able to import screens with covered up Apple logos to be able to operate in the market as a non-authorized iPhone repair technician"

    Apple continues to lobby against right to repair legislation in 18 states around the United States, which would require electronics manufacturers to sell replacement parts and repair tools to the general public and independent repair companies.

    “Apple is proving themselves to be the worldwide poster child of the Right to Repair movement,” Gay Gordon-Byrne, executive director of Repair.org, which is pushing for this legislation, told me. “They continue to make our case for us—suing legal repair providers, such as Henrik, lying to consumers about CPU performance throttling instead of battery replacements, and the coup de grace of hypocrisy—building products that are hard to repair and then proclaiming they care about the environment.”

    In the absence of right to repair legislation, there are few ways for repair professionals to get replacement parts for iPhones and Apple computers. They can harvest parts from broken phones and computers, or they can buy aftermarket parts from the Chinese grey market, which is what Huseby and thousands of repair shops in the United States and around the world opt to do.

    63 aftermarket screens

    Parts on the grey market are of varying quality. Some are made in the same factories as original manufacturer parts; others are parts that “fell off the back of a truck,” or otherwise went missing or were stolen from production lines; others were made by the original manufacturer but didn’t pass diagnostic tests; others are copies made by third parties.

    The legal status of many of these parts remains an unanswered question around the world, but the general consensus seems to be that a part is “counterfeit” if it is masquerading as an original manufacturer part rather than an aftermarket one. Counterfeit parts are “tangible goods that infringe trademarks,” the Organization for Economic Cooperation and Development, a partnership between 35 countries and a United Nations observer, wrote in a report last year.

    This definition seems straightforward, but is further muddied because often broken parts—with original manufacturer logos—are sent back to China to be refurbished and sent back to independent repair companies. Are those “counterfeit” parts or are they repaired or refurbished genuine parts?

    For his repair operation, called PCKompaniet, Huseby imported 67 iPhone 6 and iPhone 6S screens that fell into this grey area. They were seized by Norwegian customs officials because Apple logos on the inside components of the screens “had been covered up by ink marker. The ink marker could be removed with rubbing alcohol,” according to the Oslo District Court decision that ruled in favor of Huseby.

    "It is not obvious to the court what trademark function justifies Apple’s choice of imprinting the Apple logo on so many internal components"

    Huseby told me in an email that he bought the screens from a company he found at an electronics fair in Hong Kong, and that they were “refurbished screens assembled by a third party.” Huseby told the court that ‘the logo is covered up because it has never been relevant to market the products as Apple products,” the court decision states. “PCKompaniet has never removed the coverup of the Apple logo on the screens that have been imported and has no interest in doing so. PCKompaniet does not pretend or market itself as Apple authorized and does not give any indication that the repair comes with an Apple warranty.”

    The court decided that Norwegian law “does not prohibit a Norwegian mobile repair person from importing mobile screens from Asian manufacturers that are 100 percent compatible and completely identical to Apple’s own iPhone screens, so long as Apple’s trademark is not applied to the product.”

    The court noted that importing refurbished parts with visible Apple logos on them would be in violation of European Union trademark law (it would be legal, the court said, if the refurbishment of these screens had happened in the EU rather than Asia), but, crucially, decided that because the Apple logo would not be visible to customers while the product was in use, Huseby had not actually used Apple’s trademark.

    "Apple does not ‘own’ the product after they have sold it"

    The court also acknowledged that Huseby doesn’t have many other options when it comes to importing quality parts that either have Apple logos permanently removed or never had them to begin with: “It is not obvious to the court what trademark function justifies Apple’s choice of imprinting the Apple logo on so many internal components,” the court wrote. “Huseby is largely dependent on being able to import screens with covered up Apple logos to be able to operate in the market as a non-authorized iPhone repair technician.”

    Gjerstad believes Apple will lose its appeal: “Apple does not ‘own’ the product after they have sold it,” he said. “Others have the right to remove the logo and sell it as an unoriginal, compatible part.”

    The specifics of Huseby’s case won’t matter for American repair shops, but that Apple continues to aggressively pursue a repair shop owner over 63 iPhone screens signals that Apple is not interested in changing its stance on independent repair, and that right to repair activists and independent repair companies should expect a long fight ahead of them: “I feel that this case was extremely important for them to win,” Huseby said.

    He just hopes to get back to his shop, he told me.

    “I will continue to repair iPhone like I did before, no change,” he said. “I’m glad I now don’t have to be afraid of importing compatible spare parts for iPhone again.”

    Anders Hillestad translated Norwegian court documents and legal documents to English for this article."
     
    Vistar Shook likes this.
  2. hmscott

    hmscott Notebook Nobel Laureate

    Reputations:
    4,476
    Messages:
    15,698
    Likes Received:
    19,305
    Trophy Points:
    931
    Meanwhile, in the US:

    RIGHT TO REPAIR
    FTC Says 'Warranty Void If Removed' Stickers Are ********, Warns Manufacturers They're Breaking the Law
    Federal law says you can repair your own things, and manufacturers cannot force you to use their own repair services.
    Matthew Gault, Apr 10 2018, 10:30am
    https://motherboard.vice.com/en_us/article/ne9qdq/warranty-void-if-removed-stickers-illegal-ftc

    "As we’ve reported before, it is ******** and illegal under federal law for electronics manufacturers to put “Warranty Void if Removed” stickers on their gadgets, and it’s also illegal for companies to void your warranty if you fix your device yourself or via a third party.

    The Federal Trade Commission put six companies on notice today, telling them in a warning letter that their warranty practices violate federal law. If you buy a car with a warranty, take it a repair shop to fix it, then have to return the car to the manufacturer, the car company isn’t legally allowed to deny the return because you took your car to another shop. The same is true of any consumer device that costs more than $15, though many manufacturers want you to think otherwise.

    Companies such as Sony and Microsoft pepper the edges of their game consoles with warning labels telling customers that breaking the seal voids the warranty. That’s illegal. Thanks to the 1975 Magnuson-Moss Warranty Act, no manufacturer is allowed to put repair restrictions on a device it offers a warranty on. Dozens of companies do it anyway, and the FTC has put them on notice. Apple, meanwhile, routinely tells customers not to use third party repair companies, and aftermarket parts regularly break iPhones due to software updates.

    "The letters warn that FTC staff has concerns about the companies’ statements that consumers must use specified parts or service providers to keep their warranties intact," the FTC wrote in a press release. "Unless warrantors provide the parts or services for free or receive a waiver from the FTC, such statements generally are prohibited by the Magnuson-Moss Warranty Act, a law that governs consumer product warranties. Similarly, such statements may be deceptive under the FTC Act."

    The FTC hasn’t said which six companies it sent letters to, just that they “market and sell automobiles, cellular devices, and video gaming systems in the United States.” When we originally wrote about the Magnuson-Moss Warranty Act, which prohibits the “tying” of a consumer good to a certain type of replacement part, several people suggested that maybe consumer electronics companies weren’t covered under the law. With Tuesday’s action, the FTC has made clear that all consumer electronics that cost more than $15 are covered.

    “Provisions that tie warranty coverage to the use of particular products or services harm both consumers who pay more for them as well as the small businesses who offer competing products and services,” Thomas B. Pahl—Acting Director of the FTC’s Bureau of Consumer Protection—said in a press release.

    We asked the FTC for more information about the companies that it sent the letter to, but it would not say. It’s a safe bet that Sony and Microsoft are two of them, though—the Playstation 4 and Xbox One video game consoles both come with stickers that claim opening the device voids the warranty. Apple’s slick design precludes such stickers, but Apple Geniuses are trained to look for the signs of consumer meddling and will sometimes decline warranty service if it’s been repaired by an owner or third party (we’ve heard mixed things on this; customers have had many different experiences at Apple Stores. In any case, Apple does discourage people from having third parties fix their devices.)

    The companies have 30 days to update their websites and comply with U.S. federal law before the FTC takes further action. The commission hasn’t enforced warranty law with an electronics manufacturer yet, but it has used MMWA as a hammer in court before. In 2015, it settled out of court with BMW when the car manufacturer forced consumers to use authorized dealers to get repairs on its MINI line of automobiles.

    I bought an Xbox 360 when it first launched and ran into the infamous “red ring of death.” I attempted to fix the problem myself and had to use online video tutorials and a hair dryer to keep the seal intact because I was terrified Microsoft wouldn’t repair my system if I needed to send it in. Back then, I felt as I was breaking the law, but it was actually Microsoft that was in violation.

    I hope these warning letters are a nail in the coffin of stickers that freak out people who don’t know any better and just want their devices to work."
     
  3. hmscott

    hmscott Notebook Nobel Laureate

    Reputations:
    4,476
    Messages:
    15,698
    Likes Received:
    19,305
    Trophy Points:
    931
  4. thegh0sts

    thegh0sts Notebook Nobel Laureate

    Reputations:
    891
    Messages:
    7,477
    Likes Received:
    2,688
    Trophy Points:
    331
    Another good reason not to buy their junk!
     
    Kent T and hmscott like this.
  5. Raidriar

    Raidriar Notebook Prophet

    Reputations:
    1,121
    Messages:
    4,530
    Likes Received:
    2,848
    Trophy Points:
    231
    How silly....glad they lost. People should have the right to have their goods serviced by anybody they choose, with any parts they want.

    However, I've replaced broken screens for others before, and they are ALWAYS of inferior quality compared to genuine Apple displays. I would pay the Apple store to replace the screen because I've had such ****ty experiences with 3rd party screens (poor quality bezels/frames separating from the display, horrible viewing colors, poor brightness, random digitizer failure). I wish we could get the hook up at the factory where the real deal is made.

    Which is why I have a near bulletproof phone case, I don't want anything to happen to my screen.
     
    electrosoft and hmscott like this.
  6. hmscott

    hmscott Notebook Nobel Laureate

    Reputations:
    4,476
    Messages:
    15,698
    Likes Received:
    19,305
    Trophy Points:
    931
    Apparently refurbished Apple screens are a thing, did you try them too?
     
  7. Raidriar

    Raidriar Notebook Prophet

    Reputations:
    1,121
    Messages:
    4,530
    Likes Received:
    2,848
    Trophy Points:
    231
    I don't think those are available to the general public over on eBay, they must be distributed to authorized service centers only.
     
    hmscott likes this.
  8. hmscott

    hmscott Notebook Nobel Laureate

    Reputations:
    4,476
    Messages:
    15,698
    Likes Received:
    19,305
    Trophy Points:
    931
    These guys advertise they have original Apple parts...

    OEM iPhone Replacement Parts - Original iPhone ... - ETrade Supply
    Apple iPhone 7 Plus. ... Apple iPhone 6S Plus. ... If you are looking for OEM iPhone replacement parts or original iPhone replacement parts, iPhone repair parts, iPhone parts, please feel free to contact ETrade Supply.
    https://www.etradesupply.com/apple/iphone.html
     
  9. Raidriar

    Raidriar Notebook Prophet

    Reputations:
    1,121
    Messages:
    4,530
    Likes Received:
    2,848
    Trophy Points:
    231
    People claim their stuff is "OEM" but in my experience that hasn't been the case.
     
    electrosoft, hmscott and saturnotaku like this.
  10. saturnotaku

    saturnotaku Notebook Prophet

    Reputations:
    3,552
    Messages:
    6,717
    Likes Received:
    2,074
    Trophy Points:
    331
    This is why I use Lifeproof cases. They cost more but have delivered amazing protection without the bulk of an Otterbox.
     
    hmscott likes this.
  11. Raidriar

    Raidriar Notebook Prophet

    Reputations:
    1,121
    Messages:
    4,530
    Likes Received:
    2,848
    Trophy Points:
    231
    I uses the generic ebay aluminum gorilla glass case. Thing is indestructible.
     
    hmscott likes this.
Loading...

Share This Page