Monday, February 13, 2012

Chinese officials begin confiscating iPads over trademark dispute

The iPad may own the world, but it doesn't own China, apparently. Chinese authorities have begun actively seizing iPads and confiscating them over a trademark dispute with a Chinese company.

Whether Apple owns the iPad trademark in China remains unclear. Apple originally spent $55,000 to buy the European rights to the "iPad" trademark from Proview Technology's parent company several years ago, but Proview contends that it holds the right to the trademark "iPad" in China nonetheless.

In December, Apple's claim that Proview had violated Apple's trademark to the iPad name was dismissed.

China's Administrations of Industry and Commerce (AIC) has been actively confiscating iPads from store shelves because after a complaint filed by Proview, and the aforementioned court ruling, the iOS tablets are being sold in violation of Chinese trademark law.

The seizures so far have been limited to Shijiazhuang, which is the capital of Hebei province, but according to Xie Xianghui, a Proview lawyer, who spoke to the Los Angeles Times, “You’ll likely see more and more actions across the country. Apple did not follow Chinese law, so we’re confident the authorities will side with us.”

Proview has filed complaints in 20 Chinese cities since the December 2011 ruling.

Proview Technology's parent company, Proview International, registered trademarks for the name IPAD in Europe, Mexico, China and other parts of Asia starting in 2000, with the intention of launching a tablet. That never came to fruition.

Instead Proview International sold the IPAD trademark to a company linked to Apple for $55,000 in 2006. However, while Apple believed that included the trademark rights in China, Proview International’s Shenzhen subsidiary, Proview Technology still owns those rights.

Proview Technology is in deep financial trouble, filings with the Hong Kong stock exchange in 2010 showed that the company’s chairman, Yang Rongshan, had filed for bankruptcy while the company owed creditors more than $500 million.

The apparent hope was that Apple would pay a significant amount for the rights to the trademark, thus pulling Proview Technology out of its hole.

While Apple has deep pockets, this dispute is in China, and one might assume that the Chinese courts would side with a native company. It remains to be seen if the confiscations escalate outside of Shijiazhuang and Hebei province.

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