Trademark dispute over iPad puts China in difficult spot | iPad Guides

BEIJING ? Chinese officials face a choice in Apple?s dispute
with a local company over the iPad trademark ? side with a
struggling entity that a court says owns the name or with a global
brand that has created hundreds of thousands of jobs in China.
Experts say that means Beijing?s political priorities rather than
the courts will settle the dispute if it escalates.

Shenzhen Proview Technology has asked regulators to seize iPads
in China in a possible prelude to pressing Apple Inc. for a payout.
There have been seizures in some cities but no sign of action by
national-level authorities.

Proview has a strong case under Chinese trademark law, but that
could quickly change if Beijing decides to intervene to avoid
disrupting iPad sales or exports from factories in southern China
where the popular tablet computers are made, legal experts say.

?If this becomes political ? and it?s very easy to see this
becoming political ? then I think Apple?s chances look pretty
good,? said Stan Abrams, an American lawyer who teaches
intellectual property law at Beijing?s Central University of
Finance and Economics.

The dispute centers on whether Apple acquired the iPad name in
China when it bought rights in various countries from a Proview
affiliate in Taiwan in 2009 for $55,000.

Apple insists it did. But Proview, which registered the iPad
trademark in China in 2001, won a ruling from a mainland Chinese
court in December that it was not bound by that sale. Apple
appealed. A hearing is scheduled for Feb. 29.

?My gut reaction is that many of these activities really could
be seen as pre-settlement brinksmanship,? said David Wolf, a
technology marketing consultant in Beijing. ?Proview?s motive is
money, not to shut down Apple.?

Shenzhen Proview Technology is a subsidiary of LCD screen maker
Proview International Holdings Ltd., based in Hong Kong.

Chinese news reports say Proview is deeply in debt, increasing
the pressure for it to demand a substantial payout from Apple.
Proview International, meanwhile, has been suspended from trading
on the Hong Kong stock market since August 2010 and will be removed
in June if it cannot show it has sufficient assets, business
operations and working capital.

In a rapid-fire series of moves, Proview has filed a
trademark-violation lawsuit that goes to court Wednesday in
Shanghai.

That deadline is likely to prompt Apple to agree to a settlement
within a few days to avoid the uncertainty of a court fight, said
Kenny Wong, an intellectual-property lawyer with the firm Mayer
Brown JSM in Hong Kong.

?I think Apple will be under immense pressure to have this
settled as soon as possible,? he said. ?Obviously, it depends on
the amount the Shenzhen company is asking.?

In a statement, Apple said its deal with Proview covers the iPad
trademark in 10 different countries, including China. ?Proview
refuses to honor their agreement with Apple in China and a Hong
Kong court has sided with Apple in this matter,? Apple said.

Apple has pointed to a Hong Kong court ruling in July that said
Proview and the Taiwan company both were ?clearly under the
control? of the same Taiwanese businessman, Yang Long-san, and
refused to take steps required to transfer the name under the
agreement.

The companies acted together ?with the common intention of
injuring Apple,? the judge said.

But that was not the final judgment in the case and might not be
accepted by mainland courts, Wong said, because Hong Kong has a
separate legal system even though it is a Chinese territory.

Apple, which is based in Cupertino, California, also ran into a
trademark dispute before it launched the iPhone in 2007.

Cisco Systems Inc., the maker of networking hardware, had owned
the trademark since 2000 and used it for a line of
Internet-connected desk phones. After Cisco sued, the companies
reached an undisclosed settlement and the phone launch went off as
planned.

China is Apple?s fastest-growing market and the company already
has bigger sales here than any other market except the United
States. In the 12 months through September, sales totaled $12.5
billion in China and Hong Kong, nearly 12 percent of revenue.

?We?ve been very, very focused on China,? CEO Tim Cook told
investors this week at a conference in San Francisco.

The dispute comes amid complaints that Beijing is failing to do
enough to stamp out rampant unlicensed Chinese copying and exports
of goods ranging from music and Hollywood movies to designer
clothing to pharmaceuticals.

But unlike ?trademark squatters? who register names of products
already sold abroad and then demand foreign companies pay for the
Chinese rights, Proview registered the iPad name long before Apple
planned its tablet computer.

Proview says it plans to ask China?s customs agency to block
imports and exports of iPads.

Such requests are routine under rules enacted to help stamp out
rampant Chinese product piracy that has strained relations with the
United States and other trading partners.

But enforcing this one could force regulators to confront the
cost of disrupting Apple?s business. That might hurt China?s image
as a high-tech manufacturing center at a time when foreign
producers are being squeezed by rising costs.

All of Apple?s iPads are made in China by Foxconn Technologies
Group, which employs more than 1 million people in sprawling
factory complexes. Taiwan-based Foxconn previously did all its
production in China but Brazil?s government says the company plans
to open factories there to produce iPads and other products.

?The government cares about jobs. The government cares about
industry. And who is Proview? Nobody cares about Proview,? Abrams
said. ?Apple is a big employer in this country. If it comes to
politics, that is a decent argument.?

Proview has accused Apple of acting dishonestly when it bought
rights to the iPad name from the Taiwan company. According to
July?s Hong Kong court ruling, Apple set up a company in Britain to
buy the iPad trademark from owners in various markets without
revealing Apple was the purchaser.

Once the dispute arose, Proview demanded $10 million for the
name in China, the court document said.

Apple has other legal options in China, such as asking
regulators to cancel Proview?s trademark if it can be shown not to
have been used for three years, said Wong. But he said that would
take 12 to 18 months, extending the uncertainty for manufacturing
and sales.

Article source: http://www.heraldextra.com/business/national-and-international/trademark-dispute-over-ipad-puts-china-in-difficult-spot/article_5c5df862-9d2a-571f-88e0-4ee5ad1788e1.html

Source: http://ipad.e-guides.org/trademark-dispute-over-ipad-puts-china-in-difficult-spot/

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