Apple and its Chinese resellers are facing a wave of legal action in the wake of a court ruling which found that Cupertino does not own the trademark to the iPad name in China.
The case stemmed from a $1.5bn claim by Hong Kong monitor manufacturer Proview International, which registered the IPAD trademark during an ill-fated attempt to break into the tablet market in 2000. It acquired the rights to the name in many countries between 2000 and 2004, and sold the “global trademark” to the name to Apple in 2006 for around $35,000, but later said this did not apply in China.
Apple sued Proview Technology (Proview International’s Taiwanese subsidiary) in order to get the rights to the trademark after being denied them by the Chinese government. This week the Shenzhen Intermediate People’s Court took Proview’s side on the matter, but granted Apple leave to appeal.
“Apple is such a Goliath and has a good image, so people wouldn’t imagine that Apple could possibly infringe on our intellectual property rights,” Xiao Caiyuan, a lawyer for Proview at Guangdong Guanghe law firm, told the Financial Times. “People always think it’s small companies infringing upon large companies’ IPR.”
Proview reacted quickly and has applied for an immediate halt to sales of the iPad by Apple resellers in the southern Chinese cities of Shenzhen and Huizhou, with the first hearings due in the next eight weeks. The company also has bigger plans for Apple’s Chinese reseller operations.
“We are starting with these two cities, and if we are successful in getting iPad sales stopped, we will consider going after Apple resellers elsewhere in China,” said Xie Xianghui, a lawyer with Grandall, another Chinese law firm working for Proview.
All is not lost for Apple. Even if it loses the appeal, it’s unlikely that the move will seriously hurt the company since it has enough money in the bank to meet any claims. Proview has made it clear that it’s willing to negotiate, and will probably get much bigger payoff than the deal it originally made.
“We hope that this decision will make our negotiations with Apple a bit easier,” said Li Su, a Proview representative. ®