Apple is embroiled in a trademark suit over ownership of the iPad name, and the battle has taken a dark turn for Cook and company. Apple might have to shell out anywhere from $38 million to $1.6 billion if Chinese courts don’t rule in its favor — and it’s looking like they won’t.
In 2006, Taiwanese company Proview Electronics agreed to sell the iPad name (which it had registered in 2000 and 2001 in Taiwan and China) to Apple for $55,000. But Apple only secured the rights to the iPad name from Taiwan and not China, where the name is still owned by a subsidiary called Proview Technology, and is used in several of its products.
Apple used a U.K.-based company called IP Application Development to keep the transaction from receiving public attention. In fact, Proview’s chairman had no idea in 2006 that IP Application Development had any ties to Apple. But once it became clear that Apple was the company that purchased the trademark in Taiwan — and failed to do so in China — things got ugly.
“It is arrogant of Apple to just ignore our rights and go ahead selling the iPad in this market, and we will oppose that,” Proview chairman Yang Rongshan told the Financial Times back in 2010. “Besides that, we are in big financial trouble and the trademarks are a valuable asset that could help us sort out part of that trouble.”
But, hey, at least Proview is honest about its motivations.
Proview began threatening to sue Apple in October 2010, and finally followed through in 2011. Apple counter-sued, arguing it rightfully owned the iPad name, but lost that case. Apple has appealed, and according to the Xicheng district court administration, the case is “still under investigation.” The outlook for Apple winning this one isn’t good, though.
Proview has now filed lawsuits in the Chinese cities of Shenzhen and Huizhou in order to stop sales of Apple’s tablet.
“We ask the court to stop selling and marketing for Apple’s iPad in China,” Xie Xianghui, Proview Technology’s lawyer, said. The company is demanding compensation totaling between $38 million and $1.6 billion. “We also demand an apology.”
Although this trademark debacle shouldn’t stymie the fortunes of the iPad 3 in the U.S. and most of the world, it will likely hinder Apple’s momentum in China, particularly with the opening of new Apple stores. And that’s going to hurt: At Apple’s most recent earnings call, CEO Tim Cook said, “China is an extremely important market for us.”
At least Apple has a whopping $96.7 billion in the bank, so it shouldn’t hurt that much.
