Taiwan and Shenzhen, China-based Proview International could receive as much as $38 million in settlement cash from Apple for the use of the name “iPad,” which was trademarked by the company in China. The entire issue stems from what essentially appears to be Apple falling for legal sleight-of-hand tricks – you could say they didn’t read the fine print.
Proview International is an umbrella corporation that owns two subsidiaries – Proview Technology in Shenzhen and Proview Electronics in Taiwan. The Taiwanese company applied for a trademark on the “iPad” name in 2000, with its Shenzhen counterpart following suit in 2001. In 2009, Apple purchased the trademark to “iPad” for $55,000 and thought it had the green light to sell the iPad in both Taiwan and China. Not so. Turns out Proview had a trick up its sleeve, and caught Apple’s lawyers sleeping. Apple only purchased the Taiwanese-based trademark, not the Chinese one, meaning that every iPad sold in China was guilty of infringement. The legal battle between Proview and Apple that ensued has been going on since 2011. During that time, a Shenzhen court ruled against Apple, which was trying to argue that it was the owner of both trademarks. Now, Proview is keen on cashing in, knowing that every iPad that sells in China will push up the settlement price for Apple even higher.
And, for those of you thinking this is just a case of a derelict company trying to cash in at the expense of a tech giant – you’re probably right. Proview International’s core business is the manufacture and sale of computer monitors and televisions. Not sure where something called an “iPad” would fit into that market, but maybe I’m just lacking in imagination. Or not – Proview’s chairman, Yang Rongshan, was quoted as saying, “It is arrogant of Apple to just ignore our rights and go ahead selling the iPad in this market, and we will oppose that…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.” Illuminating words, those. I’m not really a business expert, but I’m pretty sure when you put your cards on the table, you’re supposed to put them face down.
Granted, Yang can probably say whatever he wants at this point. If Apple doesn’t pay up, they stand to lose the Chinese market completely. Considering China’s burgeoning consumer market and Apple’s rapidly growing popularity in the region, it’s a safe assumption that Apple will do everything it needs to do to keep the iPad there. After all, $38 million will smart now, but it’s a paltry amount compared to the sales Apple would lose if it was forced to pull the iPad out of China. Apple could wait to see if it wins its appeals (an unlikely scenario), but after that, the iFactory will have little choice but to pay up.