Chinese Court Takes a Bite Out of Apple

A Chinese court decision rejected Apple's claim that Proview was infringing on Apple's trademark and may open the door to Proview suing Apple for trademark infringement under China's laws.

2012-10-26

October 26, 2012 (Press-News.org) Apple, Inc. is renowned for being the maker of wildly popular electronic devices such as the iPod, the iPad and the Macbook. The company is trying to expand its sales into China, and has opened four Apple Stores in the country. However, Apple has run into some legal issues regarding the use of the name "iPad." A Chinese company, Proview Technology, owns the trademark to the name in China and the two companies have been battling over the rights to the name since 2006. A December 2011 Chinese court decision rejected Apple's claim that Proview was infringing on Apple's trademark and may open the door to Proview suing Apple for trademark infringement under China's laws.

Ownership of iPad

Between 2000 and 2004, Proview Technology, a flat-screen manufacturer based in Taiwan, registered IPAD as a trademark in the European Union, China, Mexico, South Korea, Singapore, Indonesia, Thailand and Vietnam---well before Apple began selling the iPad. In 2006, Proview sold its trademark to a company called IP Application Development, which was actually an agent working for Apple, for about $55,000.

After signing the agreement, the parties disagreed on whether it included China. Apple never settled the matter prior to launching the sales of its iPad in China in 2010, and the Chinese trademark office rejected Apple's trademark application for iPad in China based on the fact that a different, Hong Kong-based division of Proview, Proview Technology (Shenzhen) owns the trademark in China.

Legal Actions

After the trademark office's decision, Apple approached Proview (Shenzhen) about transferring the trademark rights. Proview (Shenzhen) asked for $10 million for the rights to the name.

Apple refused and instead filed suit in the Shenzhen Intermediate People's Court against Proview (Shenzhen) for trademark infringement. Apple claimed that the company rightfully owned the trademark to the name iPad as a result of the 2006 agreement with Proview (Taiwan). Apple claimed that it had no way of knowing that the agreement did not encompass China because the parties to the agreement did not speak Chinese.

The court rejected Apple's claim, holding that the company failed in its responsibility to conduct due diligence before the agreement.

Proview (Shenzhen) is considering suing Apple for trademark infringement, seeking $1.5 billion in damages. Additionally, the company has moved to block iPad sales in two southern Chinese cities, Shenzhen and Huizhou. If the company is successful in stopping iPad sales there, it plans to stop sales in other cities as well.

Apple's legal troubles in China demonstrate the need for capable legal assistance when conducting business overseas. If you are seeking to do business in China, consult with an attorney who is well-versed in Chinese law and has experience with international transactions to guide you.

Article provided by Karlin Law Firm
Visit us at http://www.karlinlaw.com

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Chinese Court Takes a Bite Out of Apple

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