Apple vs. Proview: What happened so far, and what next?

Apple vs. Proview: What happened so far, and what next?

Summary: A breakdown of the legal battle between Apple and Proview in China, ready for the hearing in Shanghai tomorrow, with predictions over potential outcomes.

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TOPICS: Apple
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With the next big step in the ongoing Apple vs. Proview battle on its way, it is as good a time as any to break down the situation so far, and look at what we can expect to see in the next few weeks.

Tomorrow, on February 22nd, a court in Shanghai will be hearing a request to ban iPad sales in the city, China's largest city by population.

If the court rules in favour of Proview, as they did with Sundan in Huizhou, then Apple loses its iPad sales grip in one of China's biggest cities, which could be an unfortunate sign of things to come.

Although it still seems extremely unlikely that an imports and exports customs ban will be enforced, a significant setback in Shanghai would be damaging for Apple.

Today, Apple's lawyers have threatened to sue Proview over damages from defamation, potentially adding another lawsuit to an already complicated legal fray.

Back to the basics: Who is suing whom?

The situation began when Proview International Holdings registered the 'IPAD' trademark in the EU, China, Mexico, South Korea, Singapore, Indonesia, Thailand and Vietnam between 2000--2004.

Proview Electronics (Taiwan), a branch of Proview International Holdings, agreed to sell on the "global trademark" in 2006. The rights were sold to a company called IP Application Development (i.e 'IPAD'), for $55,104.

This company was later revealed to have connections to Apple, who then bought the trademark from them.

Here is where things start to get a bit tricky.

In 2010, Proview began the process of suing Apple for trademark infringement over the 'iPad' brand. The reasoning behind the legal action was that trademarks for the Chinese market were not included in the rights sold by Proview's Taiwan arm. Those had been filed by Proview (Shenzen) in 2001.

In ongoing cases in Shenzen and Hong Kong, Apple won the preliminary injunctions, which prevented Proview from being able to sell the trademark before an agreement could be made. This effectively stymied any hopes Proview had of selling on the trademark to another bidder.

Apple's own case against Proview -- suggesting the company was infringing on its trademark with their own product -- was rejected at the end of last year by a court in Shenzen. Apple is appealing this decision, and the next hearing for this case is apparently on February 27th.

Proview began filing complaints with local authorities in around 40 cities. This saw some follow through last week, when the Chinese Administration of Industry and Commerce (AIC) were reported to have performed a raid in Shijiazhuang, in which 45 iPad 2 tablets were seized.

Despite reports of other isolated cases of tablets being confiscated at resellers, no nationwide enforcement has been confirmed. Following this news there were reports of sellers removing iPad stocks from shelves and hiding it to avoid confiscation.

Not long after that, Amazon's Chinese website took down all iPad stocks from unofficial sellers. Several other big Chinese e-commerce sites followed suit, although Proview has claimed no knowledge over this particular action.

It was revealed to have been requested by Apple as the resellers were not authorised to list the product.

Proview has also suggested they might take the legal battle back to the U.S., although that has yet to come to fruition.

Yesterday, Apple's lawyers sent a letter to Proview's chairman Yang Rongshang. In it they stated they would "formally reserve all rights to take further legal action against any individuals or entities for any damages that may result from defamatory statements and unlawful actions."

What all of this amounts to is a complicated web of lawsuits, counter lawsuits and appeals with the potential for even more on the way over defamation.

What can we expect?

  • Do not expect a customs ban. Although an imports and exports ban would be powerfully damaging to Apple, considering that Foxconn in China produces the iPad, there is the issue of costs. Raising the bond to seize shipments is an expensive process, and the iPad 2 is a popular product. This outcome is unlikely to say the least.
  • Apple might settle. It doesn't seem likely that the company would take their other major option, selling the iPad 2 under a different name, so a settlement could be the cleanest way of resolving this dispute.
  • Proview is pushing for $1.5 billion, which is a drastic jump up from the $55,104 the name originally went for. Whether or not Apple settles for that big number, or battles down to a much lower figure is another issue entirely.
  • There is still a chance Apple could win its appeal in Shenzen on the 27th, which could be the first step to turning around this entire situation. While it seems that Proview is currently doing well in the rulings, if Apple were to be recognised as the owners of the trademarks, they could put a stop to any current enforcement by local authorities.

What did they say about it?

Apple has been largely quiet on the issue, but released a statement to China Daily last week.

"We bought the worldwide rights to the iPad trademark in 10 different countries several years ago. Proview refuses to honor their agreement with Apple, and a Hong Kong court has sided with Apple on the matter."

This statement is likely in reference to the injunction issued by the Hong Kong court to prevent Proview selling on the trademark before the dispute is resolved.

A lawyer for Proview apparently countered this statement with their own, saying that "the root cause of the dispute is Apple's underestimation of the legal complications in China."

Considering Apple's serious threats over defamation, Proview might be keeping its head down over the next few weeks; at least until details of the court hearings emerge.

Image sources: Hebei Youth Daily/ifeng.com, Flickr.

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Topic: Apple

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11 comments
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  • RE: Apple vs. Proview: What happened so far, and what next?

    Suing for defamation??? Geez....
    lippidp
  • RE: Apple vs. Proview: What happened so far, and what next?

    @lipdip
    Commenting while legally clueless???? Geez...
    frogspaw
  • RE: Apple vs. Proview: What happened so far, and what next?

    You're missing a major piece of the puzzle. There is already a court ruling in Hong Kong which bars Proview from claiming any rights to the name. By filing suit in Shenzen, Proview is in contempt of court based on the Hong Kong decision.
    jragosta
    • RE: Apple vs. Proview: What happened so far, and what next?

      @jragosta
      That's not exactly what the Hong Kong ruling said. What it Said is that proview could not take further action until the dispute was settled in a Chinese court. Don't believe me???? Read it again!!!
      eargasm
    • RE: Apple vs. Proview: What happened so far, and what next?

      @jragosta <br><br>You *failed* big time to understand Hong Kong (SAR) and China geopolitics. Hong Kong's legal system is completely independent from Mainland China. There is no such thing as "in contempt of court based on the Hong Kong decision" whatsoever. If anything, Hong Kong may even have to following Mainland China's decision*, not the other way around.

      *Only When legislative conflict occured and required "interpretation of Basic Law": http://en.wikipedia.org/wiki/Hong_Kong_Basic_Law#Interpretation_of_the_Basic_Law
      Samic
  • RE: Apple vs. Proview: What happened so far, and what next?

    HOPEFULLY, Apple squashes Proview like a bug.
    Bwinski
  • RE: Apple vs. Proview: What happened so far, and what next?

    Proview, is just being a sore loser, realizing that they sold the name for 55,000 plus change too early, when if it held to it to around 2008 or so it could have had gotten a few millions (they will never get the billions they want. Let's face it, their monitors are a piece of crap!). So now they reneged on that transaction.
    And since China does not have strongs copyright, patent, judicial system, I can see Apple getting the shaft here by some judged bribed by Proview.
    I am certain that those city officials taking down iPads in local stores are getting their hands grease by Proview. It is typical chinese and third world way of cost of doing business. Only when the central government get involved and they see the ramification of this act at the local level, through the cost of a custom ban, plus the laying of workers not just at Foxcom, and then they will see the chinese reputation dragged through the mud in the court of international opinion and most important at ITC, the central government will tell Proview to back down or come down to a reasonable agreement or in my opinion just to go away. They truly have no claim to the name. Just sore losers.
    e_ecruz
  • RE: Apple vs. Proview: What happened so far, and what next?

    Can someone explain why Proview can sue in multiple cities? After all, China is supposed to be a unitary political system, as opposed to a federalist system.
    hfw10027
    • Sadly, the same way US companies sue in a specific town in TX

      @hfw10027 Although they don't have any business offices in the state.
      wackoae
  • RE: Apple vs. Proview: What happened so far, and what next?

    so... proview trademark ipad in many countries.
    apple is smart enough to make a "phantom" company go with proview and buy it, since they know that if they go directly the price would be more than the $55,104.
    proview is smart enough to only sell the global part, they keep the trademark in china.
    proview is mad when they know apple was behind the scam, and they sold gold for water, salt water, so they sue.
    apple is mad to find out china were not included in the original buy, and fire the stupid who tought global included china, but they wont admit being stupids and counter sue.
    camilass
  • Take It Away From Both Sides

    When my kids were young, they once in a while fought over a possession. My approach was simply to take it away and either give it to some organization or just discard it.

    That would be a good model for problems like the Apple vs Proview dispute. In any lawsuit there are three winners and two losers. The Court and both legal teams are winners. The plaintiff and the defendant are losers. Neither of those companies can afford to waste time and money on this argument. The best route for the court to follow is to permanently enjoin both companies from using the disputed term, with a warning that clever little tricks to skirt the ruling will meet with extreme displeasure from the court.
    martythesandler