Proview Lawsuit Accuses Apple of Fraud & Unfair Competition

Proview Technology announced on Monday that the company has amended a lawsuit against Apple to include accusations that the iPad maker committed fraud and unfair competition. The lawsuit is part of Taiwan-based Proview Electronics’ trademark battle with Apple over the rights to the name “IPAD” in mainland China.

Apple purchased the worldwide rights to the iPad trademark from Proview using a third company Apple set up to negotiate the deal under the name IP Application Development Limited. While Apple believes it purchased all rights to the name, Proview has argued in court that rights in mainland China were not part of the deal, and the company has demanded as much as US$1.6 billion in damages for trademark infringement in that country.

Apple lost an initial suit in China over the trademark, but the company has appealed based in part on new evidence that Apple’s attorneys say proves that the rights in mainland China were part of the deal and that Proview is lying about the case.

Proview has lawsuits against Apple in both China and the U.S. Today’s announcement from the bankrupt electronics firm amends the U.S. suit to accuse Apple of committing fraud and engaging in unfair competition.

At the heart of these allegations is the company Apple set up to negotiate the deal. IP Application Development Limited bought the rights to the “IPAD” trademark for $55,000 in 2009 and eventually transferred those rights to Apple.

Even while acknowledging that this is common practice in the world of trademark negotiations, Proview’s lawsuit said that Apple’s actions are fraudulent.

“While some technology companies create special purpose vehicles in order to obtain trademarks, in this case the sole function of Apple’s special purpose vehicle was intentional misrepresentation, and an effort to fraudulently induce Proview Taiwan into a sale of the IPAD trademarks,” Cal Kenney, Spokesman of Proview Taiwan, said in a statement.

The statement also said, “Among the many allegations in the U.S complaint are fraud by intentional misrepresentation, fraud by concealment, fraudulent inducement, and unfair competition. The complaint provides evidence that the December 23, 2009 agreement that Proview Taiwan entered into was fraudulently induced by the concealment and suppression of material facts by Apple’s agents, and that, as a result, the 2009 agreement is void.”

Proview’s argument also included accusations that IP Application Development Limited misrepresented what it would do with the trademark and insisted that the company wouldn’t compete with Proview—Proview, though bankrupt, is, in theory, a maker of computers, displays, and other devices.

Proview has been on a major PR campaign against Apple in both the U.S. and China. Earlier this month, Apple demanded that Proview stop speaking about the case to the press in China and accused the company of lying.