Proview takes Apple to US court claiming deceitful 'iPad' brand buy
Apple's legal battle over the 'iPad' trademark has reached the United States, as the iPhone maker faces a lawsuit for alleged fraud in a California court.
The action is expected to deepen an already acrimonious dispute between Apple and Rowell Yang Long-san over the brand in several litigations on the mainland and in Hong Kong. Yang is the bankrupt founder and former chief executive of Hong Kong-listed computer display maker Proview International.
Proview Electronics, the Taiwanese unit of Proview International, sued Apple in the Superior Court of California in Santa Clara County on February 17, with the aim of rescinding a December 23, 2009 agreement that transferred all its rights to the iPad trademark to Apple for GBP35,000 (HK$426,000).
It claimed that Apple acted 'with oppression, fraud and/or malice' during negotiations to acquire the trademark that has since become the consumer electronics giant's brand for its popular media tablet, according to a Wall Street Journal report of the US filing.
Yang, who represented himself as chairman of subsidiary Proview Technology (Shenzhen), threatened last week to sue Apple in the US in an attempt to force a settlement over the trademark's use on the mainland.
The Intermediate People's Court in Shenzhen in November ruled that the mainland rights to the brand belonged to Proview, a decision that Apple has appealed to the Higher People's Court of Guangdong province. Compensation for use of the iPad name on the mainland would cost Apple up to US$2 billion, according to Proview Shenzhen.
Carolyn Wu, Apple's spokeswoman in Beijing, declined to comment yesterday on the US lawsuit, but reiterated that Apple had bought Proview's worldwide rights to the iPad trademark in 10 different markets, including the mainland.
Proview Electronics' US filing alleged that Apple committed fraud when it used IP Application Development {minus} a company Apple had set up in Britain in 2009 to acquire trademarks to the iPad name {minus} because the firm did not explain the true purpose of buying the trademark.
Proview asked the US court for unspecified damages, an injunction to stop Apple from using the iPad name, and an order to nullify their 2009 agreement.
'This kind of case is extremely ridiculous,' said Stan Abrams, a Beijing-based intellectual property (IP) lawyer and professor.
Abrams said that using an intermediary was 'standard practice in the IP business'.
He added: 'Multinational companies don't use their own name in these negotiations because that tends to substantially drive up the price [of the target IP].'
Hong Kong's Court of First Instance upheld Apple's claim to the iPad brand in July when it barred defendants Yang and the Proview group from selling the mainland trademarks to other parties.
The court found that Taiwan-based Proview Electronics negotiated as the sole proprietor of all the iPad trademarks, including two registered on the mainland.
Those two trademarks were later found to be registered in the name of Proview Shenzhen after Apple announced the launch of its iPad tablet in January 2010.
The Hong Kong court found that the defendants, while acknowledging the mistake, refused to rectify it and asked Apple to pay US$10 million for the mainland trademarks.
King and Wood, Apple's legal counsel in Beijing, warned Yang on Monday that it may take further legal actions against him and the Proview group for statements and actions that 'wrongfully interfere with Apple's business'.