Courts in lower China put ban on iPad, force removal from stores

Posted on Feb 20 2012 - 11:35am by Mike Wewerka
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Score one for Proview, the company who claims to have ownership of the iPad trademark in China. The Chinese People’s court in the lower section of the Guangdong Province, have sided with Proview and ruled that companies and distributors stop selling the iPad in China. So far, only a few stores have complied and pulled some devices from store shelves.

Apple on the other hand is appealing this ruling, because they claim that they made an agreement with Proview to use the iPad trademark in over 10 countries and that the courts in Hong Kong (mainland China) have sided with Apple. Apple claims that Proview is not honoring the deal that both companies had previously agreed upon.

“We bought Proview’s worldwide rights to the iPad trademark in 10 different countries several years ago. Proview refuses to honor their agreement with Apple in China and a Hong Kong court has sided with Apple in this matter,” said Apple spokeswoman Carolyn Wu.

Because of the immense popularity of the iPad, the current situation shouldn’t affect the exportation of iPad to other countries, nor should it affect the upcoming release of the iPad 3, which Apple plans to reveal in early March.

There is obviously a little he said/he said going on here, as Apple claims they bought the rights to use the iPad name from a Proview subsidiary for $55,000. But Proview claims that it won a court ruling in Hong Kong that said they were not bound by the sale to Apple.

Proview, since 2010, has been having financial issues and is at risk of being de-listed from the Asian stock exchange, unless the struggling company can show it has viable assets. Now we know why Proview is asking for $2 billion from Apple.

Someone is obviously in the wrong here, as Apple is saying that Proview has breached the principals of good faith and fair dealing and has been making false and misleading statements. Proview claims that Apple has knowingly used their trademark without their approval. The Hong Kong courts believe that Proview is using this argument to simply “hurt” Apple.

So who’s at fault…

That is up to the courts decide, but I see this going one way, Apple will not pay anyone $2 billion for a name and will most likely pay Proview a simply amount like $10 – $50 million for the name. Proview will not receive its big payday it was hoping for and the money they do receive from Apple will not be enough to tie the company over for a more than a year before they eventually get de-listed and are either purchased by someone else or close up shop.

In the end, the iPad will continue to ship and will continue to make Apple billions. After all, it’s not the name “iPad” that is selling the device, it’s the product itself.

Source: Associated Press via Google