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Mar 6, 2012Legal
Apple vs Proview: A tale of mistaken identity, bankruptcy and owning the iPad name

An ongoing battle, which went public in 2010, arrived in Santa Clara, California on February 17th. A technological company in China, Proview Technology, wants Apple to pay them $1.6 billion to compensate for their alleged trademark infringement on the ‘iPad’ name. I know what you’re thinking. Apple has the iPhone, the iPod, the iTouch; how is the name ‘iPad’ not theirs? Well, it’s kind of a complicated story.

The first thing you need to know is that Proview’s mother company, Proview International Holdings Ltd., which has its headquarters in Hong Kong, has many subsidiary companies with the name Proview Technology. So back in 2000, Proview Technology, Taiwan registered the name ‘iPad’ in several countries; then one year later, Proview Technology, Shenzhen registered the name in China. The name was never successfully used, and Proview Technology, Taipei sold its global rights to a British company. In turn, that company sold the ‘iPad’ trademark to Apple in 2009 for $54,616.

As far as Apple is concerned, they bought the name fair and square and are not responsible for a company’s faulty internal affairs. Proview Technology, Shenzhen however, is adamant on assuming the rights of the trademark in Chinese mainland. Apple did try to sue them in Shenzhen for infringement, but the court denied the suit. The first time Proview sued Apple was in 2010 when it asked for $800 million in trademark infringement repairs. Apple counter-sued, but neither case provided a resolution.

Now, the situation is much more heated. Chinese officials have seized iPads being sold in Shijazhuang and Zhengzhou because they believe them to be illegal products. In Shanghai however, where there is three large Apple stores, iPad sales have not been halted as Pudong District Court rejected Proview’s request for an injunction. Other Apple-Proview battles are taking place in other Chinese states like Hong Kong and southern province, Guangdong as well. Many of the lower courts have been siding with Proview, and in fact, Apple’s appeal to the Guangdong High Court was to be held yesterday.

Proview’s main argument is very simple: someone cannot sell something that does not belong to them. The one and only owner of the ‘iPad’ name within China was Proview Technology, Shenzhen. It was not the entity which sold to Apple, therefore the sale was not valid. Legally and technically, their argument is solid. But we’re not talking about a random, irrelevant company claiming rights and selling on their behalf; we’re talking about the very same company in a different region. Apple’s mistake was an easy one to make and not an intentional, malicious act.

As an American and an Apple lover, it’s very easy for me to say that Apple has done nothing wrong. However, I do acknowledge the complex situation that Proview International Holdings Ltd., a very branched out company that used to have over 7000 employees, found itself in. If the courts prove that Apple indeed incorrectly purchased rights to the ‘iPad’ name, then I suppose the right thing would be to give up the rights in China and/or pay Proview. Similar to many other infringement cases regarding intellectual property, such as Kodak’s lawsuit against Apple or Yahoo’s lawsuit against Facebook, the suing party is looking to make a large sum of money that is desperately needed. 

Proview is no different; it is deep in debt and risks being removed from the Hong Kong stock exchange. Just recently, it was discovered that Proview is actually facing bankruptcy. Back in 2008, its ordinary computer monitor business fell apart, leaving it to depend solely on its production of LED street lights. Now, an insurance company based in Taiwan, Fubon Insurance, is waiting to collect $8.68 million in debt, money that Proview does not have. The $1.6 billion they demand from Apple will more than save them from foundering, but Fubon is not too hopeful in that respect and refuses to wait for the outcome.   

We can be sure that Apple does value the ‘iPad’ name and intellectual property as a whole. They themselves have recently warned a Chinese luggage vendor, Chinese Firm EBox Digital Technology Product, to discontinue its ‘EPAD’ trademark, which too closely resembles ‘iPad.’ The company is now planning a formal response that will shut down Apple’s complaint, which they believe, is ungrounded. Apple’s thoughts on both this matter and the Proview matter are still unannounced. Apple plans to fight Proview in the courts and has no inclination to silence them with money. That is a very smart move on Apple’s part because they know very well that succumbing to Proview’s monetary demands will be the catalyst for more problems regarding intellectual property. Many consumers wonder: will they change the name of the iPad in China? How about worldwide? Though the answer is not definite, Apple’s confident attitude about being the true owner of the trademark suggests that the iPad is planning on keeping its pad in China.

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