Apple faces fight or big payout
With its hope to secure the 'iPad' brand dashed by a Shenzhen court, Apple now must choose between the prospect of a drawn-out litigation or the expediency of a settlement.
The Intermediate People's Court in Shenzhen earlier this week ruled against Apple in a trademark-infringement lawsuit, declaring that the company had no claim to the iPad name because the rights to that brand on the mainland belonged to Proview Technology (Shenzhen).
The court rejected a 4 million yuan (HK$4.9 million) claim that Apple sought against the mainland firm and declared the iPad trademark on the mainland was not part of a transaction between Apple and the Taipei subsidiary of Proview International, a Hong Kong-based maker of computer displays.
In December 2009, Proview International agreed to sell its iPad trademarks in eight countries and territories - including two registered on the mainland - for GBP35,000 (HK$425,000) to Apple and IP Application, a company that the United States-based technology giant set up in 2009 to acquire trademarks to the iPad name worldwide.
Apple spokeswoman Carolyn Wu declined to say what action the company would pursue. Li Su, of the public relations firm Hejun Vanguard Group, which represents Proview Technology, said the Shenzhen firm would ask for 10 billion yuan in compensation from Apple in its own copyright-infringement lawsuit.
Based on its recent efforts, Apple may well continue to fight for its rights to the iPad brand. Apple had earlier received a favourable ruling from Hong Kong's High Court.
In July, the court granted Apple and IP Application the injunctions they sought to restrain Proview International and Rowell Yang Long-san, the group's former chairman and chief executive, from disposing of the mainland trademarks pending resolution of their dispute.
Justice Jeremy Poon Shiu-chor ruled that there was 'a serious question to be tried' involving the defendants' alleged breach of a December 2009 deal to sell the trademarks to Apple and IP Application.
The Hong Kong court found that Apple and IP Application, while drawing up the agreement for that sale, discovered the two mainland iPad trademarks were not owned by Taipei-based Proview Electronics as they were led to believe, but by Proview Technology.
Apple said the defendants, while acknowledging the mistake, refused to rectify the matter and asked Apple to pay US$10 million for the two trademarks. Apple and IP began their action against the Proview group on May 20 last year.
The number of iPads sold on the mainland in the second quarter, according to Analysys International - half were on the 'grey' market