Chinese Court Ponders Appeal in Apple Trademark Dispute

Posted February 29th, 2012 at 5:45 am (UTC-5)
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A Chinese court Wednesday heard arguments in Apple’s appeal in the high profile “iPad” trademark lawsuit over its blockbuster tablet computer.

Judges with the Guangdong high court are expected to announce the date for their decision whether Apple or the Taiwan-based IT company Proview has the rights to use the iPad name on devices sold in China.

The case has high stakes for both Apple — one of the world’s most profitable companies — and Proview Electronics, a once-strong computer display manufacturer that now is on the verge of bankruptcy.

Stan Abrams, a Beijing based lawyer and professor of foreign investment and intellectual property law at the Central University of Finance and Economics, said that while Apple could have avoided the suit by being more careful, Proview has also made mistakes.

“It might have registered the trademarks legally, but the way that they have handled the purchase is something else entirely, and I think at least from an outside glance at the evidence that we have seen so far, it looks like they have breached their agreement. So they don’t have clean hands, Apple might have made the mistake but I don’t think they were being malicious.”

Between 2001 and 2004 Proview registered an iPad trademark in Europe and six other markets through its flagship company, Proview Taiwan. The group’s largest operation, Proview Shenzhen, registered the trademark for the name within China.

In preparing for the launch of the iPad, Apple bought the “global” iPad trademark from Proview, a portfolio that the U.S. company believed included the Chinese trademarks.

Proview has since claimed to the contrary, and a Shenzhen court recently agreed that Apple does not own the rights to the name within China. Apple is now appealing that decision.

Proview has also filed trademarks infringement suits in two other Chinese courts, and has asked local administrators in China to halt sales and exports of the tablets.

On Tuesday, the company announced that it wants to nullify the 2009 trademark agreement in its entirety by suing Apple for fraud in the United States. Proview claims that Apple did not reveal its identity when purchasing the iPad’s global trademark, thus ensuring the sale at a relatively low price.

Abrams said Proview’s moves appears to be part of a larger strategy.

“It appears that what Proview is doing is trying to drive Apple to the bargaining table — by creating all of this trouble, by making as much mischief as possible, filing a lot of infringements cases, filing the case in the U.S. and doing other things. And making a lot of threats, some of which are reasonable and some I don’t think they are, to try to get a deal hammered out.”

As he entered Wednesday’s meeting, Proview’s lawyer Xie Xianghui said he did not rule out the possibility of a monetary settlement.

Proview has been reporting losses since 2008 and has cut its staff from 18,000 people in its heyday to only some hundreds now.

If the Guangdong courts were to side against Apple, Proview could stop iPad sales in China and ask Apple to pay it damages related to the few years in which Apple used the iPad name to market its products within China.

The outcome of the case might be the only way for Proview to solve its debt issues.