iSue over iPad Name
As gadget geeks rush to place orders for the new iPad, set to drop on March 16th boasting quad core graphics and a higher resolution screen, Apple’s battle with Proview rages on in China. The Shenzhen-based electronics maker, best known for its production of LED lights and computer monitors, is suing Apple for the rights to the iPad name, which it claims to have been using since 2001. While it sold the worldwide trademark rights to the name to Apple in 2009, Apple’s registration of the mark is not valid in China. Proview is suing Apple for alleged fraud and unfair competition, hoping to have the 2009 trademark sale ruled void.
Intellectual property rights have long been a thorn in the side of American companies doing business in China, which has an aggressive copying culture. As Apple faces an increasingly saturated device market at home, China, with its staggering population and demand for tech goods, represents an important potential revenue stream as the number two market by sales after the United States.
There is speculation that this suit has only come to a head because of Proview’s financial troubles. A group of Proview’s creditors, state-controlled banks, claim to have seized Proview assets, including the trademark to the iPad name during a reorganization in early 2009. Trademarks indicate origin, and assure consumers that a product comes from a valid source. A Proview brand iPad might hold considerably less allure to consumers than an Apple brand iPad would, but if Proview prevails Apple will have to remove its goods from shelves in mainland China.
In an open letter to Chinese retailers, Proview urged that unless there was a halt in iPad sales, the company would take drastic legal action for trademark infringement. The Wall Street Journal translated the letter from Chinese as saying in part, “In accordance with the Trademark Law of the People’s Republic of China, the use of a trademark that is identical with or similar to ‘IPAD’ on goods or packaging by any entity or individual without our authorization shall constitute an infringement of our exclusive rights.” The letter closed, “Any above activities shall be deemed as a deliberate infringement, and we will, without prior notice, take the most severe measures possible to hold the infringers responsible for any legal liability, including but not limited to administrative, civil and criminal liabilities,” and then ended with a menacing exclamation, “You are hereby informed!”
The suit is emblematic of the myriad trademark issues running rampant in the Chinese marketplace. Mark Cohen, a visiting professor at our very own Fordham Law stated that “[a]busive registrations under China’s trademark system abound,” and that “[i]n China today there is everything from Apad to Zpad registered or under consideration – from companies that may not make products that compete with the iPad or make products at all.”
Initial legal action had a lower court refuse to issue an injunction to stop Apple sales, and The Higher People’s Court in Guangzhou, China heard an appeal from Apple on February 29, and is expected to render a decision in the near future. Apple maintains that its 2009 purchase of the trademark is valid, but if the deal is found void, trademarks in 10 countries, including the European Union and Mexico, would revert back to Proview. With so much at stake, Proview needs a settlement to pay its creditors, and Apple needs to satisfy the demands of its second largest market, the fight is sure to be long and hard fought.
