© Springer-Verlag Berlin Heidelberg 2015Yimeei Guo (ed.)Research on Selected China’s Legal Issues of E-Business10.1007/978-3-662-44542-6_15
15. iPad Trademark Dispute: An IPR Management Lesson Not Just for Apple
School of Law, University of Xiamen, Xiamen, 361005, China
Apple’s paying $60 million to settle iPad trademark long-standing dispute between itself and Proview Shenzhen. It is worthy for us to have a glance on the dispute at first and to analyze the IPR management lesson for Apple, and figure out some alarms and warnings for China’s domestic enterprises to deal with trademark right problems as well.
As an internationally renowned trademark brand in the USA, Apple keeps introducing revolutionary electronic products. For example, when new iPad products, e.g., mini iPad and iPhone 5 have been launched since March 2012, it is able to rally multitudes at its call around the world. China is Apple’s second-largest market after the USA. China contributed 7.9 billion US dollars, or about 20 % of Apple’s revenues, during its second fiscal quarter in 2012 (Apple buys trademark 2012). But, it is prevented for China’s consumption because of a long-standing trademark dispute between Apple and Proview Shenzhen starting from 2010.
Even though Apple finally agreed to pay Proview Shenzhen $60 million to settle the trademark dispute between them in June 2012, it has not yet assumed ownership of the iPad mark. And now Grandall, the law firm that represented Proview in its spat with Apple, has asked a court to seize the mark until the company pays off its legal fees (China iPad Trademark Dispute Refuses to Stay Dead 2012).
Nevertheless, for Apple, the settlement can help it seize huge market opportunities in China. Otherwise, Apple might not have been able to sell its popular tablet computers in the Chinese mainland. It should also be noted that currently the amount of the captioned trademark settlement is reported to be the top one among all IPR infringement cases in China (Qu 2012), it thoroughly breaks the previous “nominal price” theory for trademark right.
Thus, it is worthy for us to have a glance on iPad trademark dispute between Apple and Proview Shenzhen at first and to analyze the IPR management lesson for Apple, and figure out some alarms and warnings for China’s domestic enterprises to deal with trademark right problems as well.
15.2 IPad Trademark Dispute—a Fact Summary
Proview Shenzhen had previously claimed that the Taipei subsidiary of its Hong Kong-based parent company, Proview International Holdings Limited, registered the iPad trademark in a number of countries and regions as early as 2000.
According to testimony in the legal fight, Apple retained British lawyers several years ago to set up a company, IP Application Development Limited, to buy up rights to the iPad name around the world. Apple paid only £35,000 to Proview Taipei for that company’s iPad trademarks in various countries.
Though Apple bought the rights to use the iPad trademark from Proview Taipei in 2009, Proview Shenzhen said it reserved the right to use the trademark it registered on the Chinese mainland in 2001. The two sides have since been entangled in a drawn-out legal battle.
Apple and its proxy IP Co. for the trademark purchase brought a lawsuit against Proview Shenzhen on April 19, 2010, concerning iPad trademark’s attribution. Guangdong Province Higher People’s Court heard the case in February 2012, as Apple and IP Co. appealed the previous court ruling by the Shenzhen intermediate People’s Court in favor of Proview Shenzhen in November 2011 (Apple buys trademark 2012).
Apple also filed a complaint against Proview Shenzhen in Hong Kong for failing to honor its agreement in May 2010. The Hong Kong court decides in Apple’s favor in June 2011 (Elmer-DeWitt 2012). In May 2012, the Hong Kong court also decided that two copies of expert report presented by Proview Shenzhen in 2011 will not be recognized by the court because they were not in accord with the court’s instruction (The Materials for Proview v 2012).
As to Proview Shenzhen, it has started to bring the lawsuit against Apple’s distributors in Guangdong district since December 2011, it demanded Apple’s distributors stop infringement, i.e., stop using iPad trademark (Memorabilia of TM dispute between Proview and Apple 2012). On February 17, 2012, Guangdong Province Huizhou City Intermediate People’s Court held that one of the Apple’s distributors in Shenzhen to be prohibited to sell Apple’s iPad. This the first Apple’s distributor held losing the case so far (Guangdong Province Huizhou City 2012).
In January 2012, Proview Shenzhen also filed the lawsuit against Apple Trading (Shanghai)Co., Ltd for trademark infringement. But on February 23, 2012, its application for interim injunction was rejected by Shanghai Pudong New Area People’s Court on the grounds that “iPad trademark case is still at second trial in Guangdong’s higher court” (He 2012).