Monday, February 20, 2012

Lower Chinese court rules distributors should halt sales of iPads

A dispute over ownership of the iPad trademark in China continued to escalate, as on Monday Shenzhen Proview Technology, the Chinese company that claims ownership of the name, announced that it had won a court decision that could prohibit sales of Apple's popular tablet in parts of the country.

The ruling, which was issued on Friday by the Intermediate People's Court in Huizhou, a city in southern China's Guangdong province, said that distributors should stop selling iPads in China. Just how widespread the effects of that will be remains to be seen: Proview, unable to get a statewide ruling in its favor, has filed lawsuits in several localities and also requested authorities in 40 cities to block iPad sales.

Apple continues to insist it holds the rights to the trademark of the iPad name in China. Apple spokeswoman Carolyn Wu said, "We bought Proview's worldwide rights to the iPad trademark in 10 different countries several years ago. Proview refuses to honor their agreement with Apple in China and a Hong Kong court has sided with Apple in this matter."

Apple says that it acquired the iPad trademark in various countries --- including China --- when in 2009 it bought the rights from Taiwan's Proview International for 35,000 British pounds ($55,000).  Shenzhen Proview Technology, however, disagrees, saying that although Apple bought the rights to the iPad name from Proview International (in typically confusing style, originally that was said to be the parent company of Proview Technology, but now some say it is a subsidiary), it still owns the trademark in China.

In December of 2011, Proview won a court ruling that stated the company was not bound by the 2009 sale. Admittedly, whoever at the parent company agreed to that low, low sales price for the iPad trademark hadn't been paying attention to frequent rumors over an Apple tablet, which came fruition in 2010.

If they had, they would have asked for far more money to sell the trademark. Proview Technology said last Friday it would take Apple to court for $2 billion in compensation.

Nationally, Proview is still on its own. While iPads have been pulled from stores shelves in some Chinese cities, there has been no sign of action from the national government. Proview has gone so far as to request that Chinese customs halt both imports and exports of the iPad.

An export ban would also halt global shipments from Apple's Foxconn manufacturing partner, giving Apple a huge incentive to come to some agreement with Proview. Chinese customs authorities have refused to intervene.

Proview has filed a trademark-violation lawsuit that goes to court Wednesday in Shanghai.

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