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Apple settles Chinese trademark row over iPad

Jul 9, 2012

US firm agrees to pay $60m to Chinese company Proview to settle row over rights to iPad name, Guangdong court says.

Greater China has become Apple's fastest-growing region, with revenues second only to the US [GALLO/GETTY]
Apple, the US technology company, has paid a Chinese firm $60m to settle a long-running dispute over the iPad trademark in China, a court has said.
The government body overseeing trademarks has been asked to immediately recognise Apple's rights to the iPad name, the High Court of the southern province of Guangdong said on its website on Monday.
Apple last week paid $60m to settle the dispute, according to the statement - well below the $400m the Chinese company had demanded.
"This means that the dispute between Apple and Shenzhen Proview over the rights to the iPad brand is resolved in a satisfactory manner," the court statement said.
"The new iPad has been so late to the China market that if they drag it any longer, Apple will stand to lose quite a bit more," said Teck-Zhung Wong, a Beijing-based analyst with technology research firm IDC.
"The settlement is great news for Apple. It just allows them to get on with business and stop being distracted."
'Practical' considerations
Both Proview Technology, based in the southern city of Shenzhen, and Apple had claimed ownership of the Chinese rights to the "iPad" trademark and were locked in a legal battle.
Proview's Taiwanese affiliate registered "iPad" as a trademark in several countries, including China, as early as 2000 - years before Apple began selling its hugely successful tablet computer.
Apple subsequently bought the rights for the global trademark - including from the Taiwanese affiliate - but Proview said the deal did not include the rights for mainland China, and sued after the iPad was launched.
The case moved to the high court after the Intermediate People's Court in Shenzhen rejected Apple's complaint against Proview over the infringement case.
It is rare for a Chinese enterprise to accuse an overseas firm of trademark breaches - although foreign companies frequently complain of intellectual property rights violations in China.
Xie Xianghui, a lawyer for Proview, said the debt-ridden Chinese company had originally sought $400m in compensation for giving up the rights, but settled for the lower amount out of "practical" considerations.
"We previously hoped that the compensation would be $400m, so that it would be enough to pay back all the debts," Xie told the AFP news agency on Monday.
"We have to say it is the practical choice. It is a comprehensive settlement and the end of the lawsuit in mainland China."
Xie said Proview felt "pressure" to settle, though he declined to say why.
"Court mediation gave us some pressure," he said. Proview had previously sought bans on iPad sales in China and blocks on imports into and exports out of the country.
Seized iPads
The legal battle did not halt sales of the iPad through Apple's five retail stores in mainland China, a hugely valuable market for the US company.
But Chinese media reported that local officials had seized scores of iPads in at least two cities, and the resolution of the case should clear the way for Apple to sell the iPad free of any trademark concerns.
Last year, Apple took Proview to court in China itself, claiming trademark infringement, but a court ruled the US company lacked "supporting facts and evidence" for its claim.
Apple's dispute with Proview highlighted the possible pitfalls for global companies in China's infant trademark system.
It also posed a challenge for the communist government, which wants to attract technology investors to develop China's economy.
Apple is wildly popular in China, where die-hard fans have been known to line up for days to get their hands on its latest offerings.
Greater China - which includes Hong Kong and Taiwan - has become Apple's fastest-growing region, with revenues second only to the US.
Apple officials were not immediately available for comment on Monday's announcement.

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