Apple Settles with Proview Technology Regarding iPad Trademark in China

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Proview Technology (Shenzhen) has been paid $60 million by Apple Inc to complete an argument regarding the trademark in China for the iPad. The lawsuit delayed the launch of the new iPad in China and even hampered some sales. Before its launch, Proview was asking Chinese authorities in multiple Chinese cities to order re-sellers to remove iPads from their shelves. The settlement, which was mediated by a court, was announced on the Higher People’s Court of Guangdong province’s website. The settlement allows Apple to move forward with the sale of its tablet in one of the company’s most important markets.

“The settlement is great news for Apple. It just allows them to get on with business and stop being distracted. The new iPad has been so late to the China market that if they drag it any longer, Apple will stand to lose quite a bit more,” said Teck-Zhung Wong. Wong is an analyst with the technology research firm of IDC.

  

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Proview Technology is a unit of Hong Kong Proview International Holdings Ltd. Apple and Proview Technology have been in the midst of negotiating a settlement ever since the court held its first hearing back in February. This occurred after Apple appealed the decision of a lower court. Apple claims that it purchased ownership of the iPad trademark from Proview in multiple countries but the company says that Apple dealt only with one area of Proview. A ruling from a court in China said that Proview owned the name in China, which Proview registered the trademark in 2001 for the iPad. In May, Proview attempted to sue Apple in the United States but the case was dismissed.

The market for PC tablets in China is dominated by the iPad, which holds a 70 percent share of the market. Two tablets that have made some ground recently include the Lenovo Group Ltd’s Lepads and Samsung Electronics Co Ltd’s Galaxy Tabs. Apple has seen some impressive growth in Greater China, which includes Hong Kong, China and Taiwan as sales in the second quarter have increased to $7.9 billion. Apple has shipped over 6 million iPads to mainland China since the third quarter of 2010 to March of 2012. Proview was trying to acquire $1.57 billion from Apple and its creditors in the lawsuit.

The settlement money, $60 million, is going to be deposited into a court-designated account and then used to pay the creditors of Proview. Fubon Insurance, from Taiwan, applied for bankruptcy against Proview in March because of an outstanding debt of $8.68 million.

“The settlement fee is not bad for Proview, because although Proview owns the trademark, it was Apple, not Proview, who created the brand’s value,” said Chen Jihong. Jihong is an intellectual property rights lawyer for Zhong Lun Law Firm.