Apple's $60M for China iPad trademark merely 'tuition fee'

Summary:If debt-ridden Proview wasn't under great pressure from its creditors to repay its debts, it would have sought higher compensation from Apple over iPad trademark in China, said Proview's founder and chairman, Yang Rongshan.

"iPad has become a very popular product in China these days, and the country is also Apple's second fast-growing market after the US. $60 million doesn't mean anything to Apple. It is just the tuition fees Apple paid in the Chinese market," Yang said during an interview with a Chinese newspaper National Business Daily published Tuesday.

According to Higher People's Court of Guangzhou, Apple paid US$60 million to its iPad trademark rival tech company Proview Technology (Shenzhen) through mediation in China last month, which will solve a basket of disputes derived from the trademark case in China, local reports said Monday.

Yang confirmed Proview transferred overall rights of the iPad trademark to Apple after getting paid the $60 million. Nevertheless, he indicated the amount was far from the US$200 million debt it owned to a bunch of creditors which had exerted pressure on the company, and Proview had to end the mediation with Apple as soon as possible.

"If not under the great pressure from the creditors, we would have obtained even higher compensation from Apple for the trademark of iPad in China," said Yang. Records from the Higher court showed Proview owed money to over 100 companies. The allocation of the $60 million will remain an issue during the liquidation in the future.

Yang said Apple will be able to sell iPad legitimately in China in the future. The new iPad is still unavailable in official sales channels in China after it was launched in nearly 90 countries. However, sales of the older versions of iPad in China had been barely affected in the past months.  

Apple agreed to pay $60 million to Proview because when it again lost the lawsuit in the higher court, it would not only face the possibility of compensation but would have to change the name of the tablet in China, which would be harmful to its brand, a Shanghai-based lawyer You Yunting commented in the report.

Apple had lost a previous lawsuit against Proview in December 2011 when it claimed itself as the legitimate owner of the iPad trademark. A Chinese lower court recognized Proview's ownership over the Chinese iPad trademark, which was registered in China back to 2000.

Apple then had offered to pay Proview US$16 million for the rights of the iPad name in China, which was far less from the US$400 million Proview was seeking, said reports in May.

Proview was one of the world's four largest monitor producers before its business began falling apart since 2008. In the midst of the lawsuit against Apple, the company officially filed for bankruptcy.

Proview owed as much as US$400 million to eight Chinese banks, Chinese reports indicated.

 

Topics: Tablets, Apple, China

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Cyrus Lee, writing under a pen name, is a Hong Kong-based reporter in an English-language newspaper and a correspondent for a radio station.

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