Taking a bite out of Apple
What's happened? Apple seems to be getting attacked from all sides. Not the least of which is Shenzhen Proview Technology, which is trying to stop the United States tech giant from selling its iPads on the mainland or even exporting iPads to other countries. At first, the case would seem like a no-brainer. It's Apple, right? But a few mainland courts have ruled in Proview's favour and forced shops to take iPads off the shelves. The case is not as simple as it seems.
Who is Shenzhen Proview Technology? The company is a subsidiary of a Hong Kong company, Proview International Holdings. That company owns production plants in Shenzhen, Wuhan , Taiwan and Brazil. Shenzhen Proview is deeply in debt, increasing the pressure for it to demand a big payout from Apple. Proview International has been suspended from trading on the Hong Kong stock market since August 2010 and will be removed from the exchange in June if it cannot show it has enough resources to keep running.
Apple is a big customer of Foxconn, which is the mainland's largest private employer. That fact that Apple makes its products in China will make it difficult for the central government to stay out of this case.
Why would a court rule in Proview's favour? Proview registered the iPad trademark in China in 2001. Apple says it bought the iPad name in China when it purchased rights to the name in various countries from a Proview-linked company in Taiwan in 2009. Proview says it did not sell the rights. But the parent company has already lost a court case in Hong Kong. Unlike 'trademark squatters', who register names of products already sold abroad and then demand that foreign companies pay for the Chinese rights, Proview registered the iPad name long before Apple planned its tablet.
Where will the next hearing be held? The latest one started in Shanghai yesterday.
When will this be over? Apple is under pressure to pay Proview and avoid a court case. But if it goes to court, it could drag on for a long time.