Did Tim Cook pay $60M iPad settlement out of own pocket?

Did Tim Cook pay $60M iPad settlement out of own pocket?

Summary: Proview Technology’s CEO and legal advisor suggest Tim Cook dugout from his own pocket to pay the US$60 million compensation in China's iPad trademark lawsuit--almost the same amount in dividends the Apple CEO had earlier turned down.

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TOPICS: iPad, Apple, Legal, China
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Pointing out that Apple CEO Tim Cook in May refused his US$75 million dividends from over 1 million shares, Proview's founder and chairman Yang Rongshan--who fought with Apple for the iPad trademark in China and was awarded US$60 million by the court--said people around him realized the amount was "very close with the compensation Apple would pay for Proview".

Ray Mai, who served in the legal department for Proview's Taiwan arm, held the same view. Speaking to IT Times, a mainland-based technology newspaper, Mai said the trademark dispute was distinguishable from other infringement cases as someone in Apple who had made a mistake, and the consequences of which should not be passed to the shareholders.  

"Since Steve Jobs was gone, Cook should take up the responsibility," said Mai.

Proview had accused Apple of acquiring its rights to the iPad name in a deceptive way. Apple set up a UK-registered company, IP Application Development Ltd (IPADL), and bought the naming rights from Proview's Taiwanese affiliate in 2009 for merely US$55,000.

IPADL's agents intentionally misrepresented the reason to purchase the trademark as they told Proview "iPad" was an abbreviation for the company name. They also said the company would not use the trademark to compete with Proview. Record showed Apple launched the iPad only a month after the deal sealed.

Mai was a key person in the trademark transaction.

The IT Times report said Mai's words revealed employees from Apple did make some serious low-level mistakes during the transaction. However, he refused to give out more details.

Apple lost a lawsuit against Proview in December 2011 when it said it was the legitimate owner of the iPad trademark in China.

In a filing with the U.S. Securities and Exchange Commission in late-May 2012, Apple indicated Cook asked his restricted stock units not receive dividends amounting to around US$75 million.

A Chinese higher court announced last month Apple paid US$60 million to Proview and settled the case through mediation in China.

Yang, who is also Proview's CEO, said the company had never asked for compensation of US$3 billion or US$400 million as previously reported.  He said Apple played tough in the lawsuit and was ready to wait for one or two more years if Proview demanded a higher compensation.

Topics: iPad, Apple, Legal, China

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11 comments
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  • WTF

    Say if $60 million kis what it osted get the ipad trademark in the fist place, then how wqould it not cost the shareholders?

    Buying a trademark is the cost of doing buisness. They tried to get a $60 million trademark for $55000, and that was the gamble (1/1000 of the price). So how could the ceo be on the hook for this? I am sure all shareholders would want it for 1/1000 of the price. Ether way they needed the name. And the 55000 deal bought time. So if anything it should of costed 55000 to the ceo not 60milllion.


    Also as far as I know is that Apple doesn't pay dividents to shareholders, so why they care?
    ShqTth
    • Don't you just love it when...

      Someone on the Internet posts to a forum without doing their homework?

      "Also as far as I know is that Apple doesn't pay dividents to shareholders, so why they care?"
      Apple are paying a dividend this year. It was announced in March.

      " They tried to get a $60 million trademark for $55000, and that was the gamble (1/1000 of the price). "
      They were prepared to sell the trademark for 60k so they sold it.

      The part you are missing is that the value that was added to name was all Apple's doing.

      The real irony is of course that Proview registered the trademark for their iMac clone back in the day.

      "Ether way they needed the name. And the 55000 deal bought time. So if anything it should of costed 55000 to the ceo not 60milllion."
      You aren't getting it, are you? The trademark was sold, but they decided to double dip when they had 60 million in creditors chasing them and they discovered that Apple had a roaring success on their hands. If the iPad had failed they wouldn't have bothered.

      Double-dipping scum of the worse kind.

      Either way Apple needed to get the iPad out in China and will clear this figure with less that 400k units sold. Probably clear that in about 4-5 hours of sales.
      jgpmolloy
      • Scum?

        First of all the case was about China. Proview claimed they had sold the rights for all areas except for China were proview was based.

        Secondly calling people scum for chasing their interests is bizarre. Apple is suing itself all the time.

        What Apple did is a bit like grooming. An old chap that poses as a teenager to lure a little girl into a trap. Misrepresenting yourself is seldom a good thing.

        I bet you would sell a trademark to your neighbor's startup company for a different price than to a multinational that was knocking on your door.

        Proview needed the 60 million to pay a tiny percentage of the debt that they owe to their creditors. If Apple had done the same with a healthy company they would have been on the hook for a lot more.
        rhon1
    • where have you been

      I guess you missed the memo?

      http://www.apple.com/pr/library/2012/03/19Apple-Announces-Plans-to-Initiate-Dividend-and-Share-Repurchase-Program.html
      waynefox
  • Because Apple's/Cook's 'cost' in loss of reputation would be even greater.

    > Say if $60 million kis what it osted get the ipad trademark
    > in the fist place, then how wqould it not cost the shareholders?

    Well, in the fist [sic] place how do we know about the $55K they said it costed [sic] them, originally? Simple: because that's what Apple told their shareholders via their various SEC filings. Back then, I'm sure Cook et al were plenty proud of themselves for having so cleverly snookered those poor saps at Proview. Ah, good times.

    To come back a few years later and say, "Gee, guys, we kinda screwed up...by several orders of magnitude" would make Cook et al look like incompetent dolts. And even if they are in fact mouthbreathing idiots, then belatedly writing off more charges against earnings would serve only to exacerbate their unfortunate circumstances.
    Justa Notherguy
  • Wow DWS

    Dripping with stupid.

    If 60 million is close to 75 million, I hope Yang Rongshan will send me 15 million, because it's close to nothing.

    At the risk of some permanent brain injury, let me revisit the scenario: the CEO of a company with 100 billion in the bank waives his options in order to provide the cash for the settlement. Let's assume that's true. My conclusion: Apple would have paid 75 million to make Proview go away and somebody left money on the table. Maybe Mr. Rongshan should give 15 mil. to his shareholders for signing off on the settlement.

    As to Ray Mai in the legal department, I hope he's the tragic recipient of a poor translation. Proview sued Apple, not Tim Cook. Whether the settlement is expensed or not does not matter. To me, neither accountant nor lawyer, the money brings Proview whole as to the value of the trademark, and to Apple it means the cost of the trademark is now 60,055,000 and I don't think there's any thing really different about this event relative to other acquisitions of trademarks (gentle reader, as you may recall, iPhone was a trademark of Cisco and Apple acquired that.)

    Yep, these assertions are so wackaloon that I'm wondering if the parties quoted are making this into a personal mano a mano thing, instead of what it really was, Proview underestimating the value of the trademark as a future global brand and not investigating who the buyer really was, to its management's embarrassment, but given a second shot at some money through the civil courts of China. We won! Look Cook didn't get stock options. Ha ha.

    Or they're dripping with stupid.
    DannyO_0x98
    • I couldn't even bring myself to rebut this.

      And I'm glad I didn't since you've done so perfectly!
      matthew_maurice
  • hello???

    uhh, the two companies settled out of court, the court did not "award" the china company anything....

    -------------
    chairman Yang Rongshan--who fought with Apple for the iPad trademark in China and was awarded US$60 million by the court-
    ---------------------
    honkj
  • How It Plays in China...

    If this is what happened - that Tim Cook paid the cost himself - I think it will have a profound impact in China, with Apple workers there and with the Chinese government. It may well be read as 'I'm Tim Cook. I am in charge of Apple. I am the one responsible when Apple screws up. And, I am bearing the cost and the loss of face for what happened here'.

    This is something that could redefine Tim Cook and Apple in China in a very significant, very positive way. If so, that $75 million in forgone compensation could be the best money Tim Cook ever spent.
    z2217
  • Stupid

    I was going to say this will probably be the stupidest thing I will read all week, but it's only Tuesday, and you guys have Violet blue on staff. So I'm hoping that by Friday you will have s etching that will out stupid the stupid of this article.
    His_Shadow
    • That...

      ...should be "something that will".
      His_Shadow