In an official statement yesterday, Apple charged legal opponent Proview of deliberately “misleading” Chinese courts in the ongoing battle between the two companies over the trademark rights of “iPad” in that country.
Base image of tug-of-war via Shutterstock.
While Proview first sued Apple over the name in October 2010, the issue stems from the 2009 purchase by Apple of the iPad trademark from a Taiwan affiliate of Proview in an agreement that was intended to cover the trademark’s use in mainland China. Apple now argues that Proview is misleading Chinese courts by claiming that the iPad trademark was not properly transferred in an effort to stave off bankruptcy in the face of increasing debt.
Apple spokesperson Carolyn Wu alleged that Proview intentionally constructed the original sale of the trademark so that future issues over ownership could be raised later in China, forcing Apple to pay twice for the same rights, as discussed by The Wall Street Journal. Apple claims that Proview insisted the 2009 transaction be conducted by its Taiwanese subsidiary even though a separate subsidiary of the company in Shenzhen actually owned the trademark. Ms. Wu states that Apple “didn’t know the reasons at the time” for Proview’s insistence on performing the deal via its Taiwanese subsidiary. In addition to creating a future option for litigation in China, the Taiwan sale also allowed Proview to collect the purchase price without having to pay its creditors, which currently hold more than $400 million of Proview’s debt.
Apple’s official statement read,
Proview is misleading Chinese courts and customers with claims that the iPad trademarks cannot be transferred, or that mistakes were made in handling the transaction…We respect Chinese laws and regulations, and as a company that generates a lot of intellectual property we would never knowingly abuse someone else’s trademarks.
While Proview would certainly agree with some commentators that the last part of Apple’s statement is, well, laughable, they are not hesitating to hit back at Apple and already won a Chinese case last year, with the court holding that Apple’s purchase was invalid because the selling subsidiary didn’t actually own the rights to the mark in China. Apple’s appeal of that decision is now pending before the Higher People’s Court of Guangdong while Proview seeks to use its lower court judgment to block retailers and importers from selling iPads.
With money the sole issue in the case — Proview clearly has no intention of using the iPad mark for product purposes, considering their factory was dismantled early this year to pay off creditors — the Chinese company has indicated that it’s open to a payoff to end this tiff. “The fact is that Apple’s former lawyer made a silly mistake,” Proview’s attorney Xiao Caiyuan said. “Proview still thinks both sides can solve the dispute by peaceful talks.”