Apple (s aapl)recently ran into a bit of a pickle concerning its iPad trademark in China, its second-most important worldwide market. The problem is that Proview Technology, a Taiwanese-owned company, says it owns the rights to the trademark “IPAD” in China, and Apple is in violation of said trademark. And a court appears to agree.
Proview is a manufacturer of flatscreens which unsuccessfully launched a tablet called IPAD in 2000, registering the trademark in many countries around the world. In 2006, Proview Electronics, which shares a parent company with Proview Technology, sold Apple use of the IPAD name, but whether or not that deal included China is debated by the two companies.
Apple’s applied for ownership of two Chinese trademarks related to the iPad name (“iPAD” and “IPAD”), made prior to its introduction of the iPad for sale to Chinese consumers. But that application was rejected by the trademark office because they were listed as owned by Proview Technology, not Proview Electronics, which brokered the original sale.
Apple sued Proview Technology, seeking the court’s recognition that it is in fact the owner of the patents, but said suit was rejected by the Shenzhen Intermediate People’s Court on Tuesday. In a statement, the court said any claims Apple had secured on the trademark only applied to Proview’s Taiwan subsidiary, not the Shenzen-based Proview Technology.
Apple can still appeal the decision, but in the meantime, it faces suits from Proview Technology that seek to ban the sale of iPads in Shenzhen and Huizhou, two cities in southern China. Proview is seeking injunctions in those two cities first, with the intent of pursuing similar blocks country-wide should those rulings go in its favor. The hearing for the Shenzhen case begins on Dec. 30.
Obviously, having its case to gain ownership of the trademarks thrown out isn’t good news for Apple, but winning there was only the best-possible outcome for the iPhone-maker, and losing is by no means the end of the world. Proview is admittedly threatening its business in a key market, and seeking $1.5 billion in compensation from Chinese courts for copyright infringement. But we’ll likely never see either a banning of the iPad in any Chinese city, or a payday quite so large.
Proview is an admittedly struggling company, according to reports. It’s in this for a payout, but to fight Apple in the long haul isn’t a practical solution for the small-time component maker. Speaking to the Financial Times, (s pso) Proview representative Li Su basically admitted as much, noting the company hopes the court’s rejection of Apple’s claim on the trademark makes its “negotiations with Apple a little easier.”
We’ll have to wait and see how this shakes out, but it’s probably going to take the form of a settlement for a sum somewhere far south of the $1.5 billion Proview is seeking in damages, since Apple likely wants this to go away as quickly as possible so it can continue its impressive success with the iPad in China without distraction.