Orange County - Apple's great expansion into China has been marred by a trademark infringement lawsuit brought about by Proview Technology over use of the name "iPad." Most recently, the Shenzhen subsidiary of the Hong-Kong-based company has filed for a permanent injunction to ban Apple from selling its iPads in China altogether.
The Chinese market, known for its rampant intellectual property infringement, is now shamelessly producing a clone to the iPad called iPed. Typically, this type of infringement from the Chinese companies would result in a trademark infringement lawsuit mounted by the U.S. company whose trademark is being infringed. Things have changed now, and unfortunately for Apple, it may potentially be blacklisted from China's growing consumer market.
With its economic landscape rapidly changing, and its middle and upper classes growing, China has created a huge fervor from foreign companies, eager to break into its market. For example, Embraer, a Brazilian private jet manufacturer, recently donated a $30 million private jet to Hong Kong actor Jackie Chan in exchange for his valuable endorsement.
In 2000, Proview Technologies, which provides LED lighting solutions, filed to trademark both the term "iPad" and "IPAD" in China, as its Taiwanese subsidiary had sold its trademark rights for $55,000 to the UK-based rights company, IP Application Development. In September 2010, Apple began selling the iPad tablet in China with the understanding that it had acquired the trademark rights to the "iPad" name from IP Application.
Proview filed its trademark infringement complaint the following year, seeking 240 million Yuan ($38 million USD) in damages from Apple's use of "iPad." Apple responded with a counterclaim, however it was dismissed by a Chinese court. According to the 2011 court ruling in favor of Proview Technologies, although Apple had purchased trademark rights to "iPad" from the UK company, the rights in the contract did not extend to its use in China.
Proview has also filed trademark infringement complaints in two other Chinese cities and is suing several retailers for selling the "iPad" tablet. Unlike high profile litigation in the United States which can go on for years, rulings in Chinese courts are often concluded in a matter of months. Near bankruptcy after its efforts to banish the Apple iPad from China, this verdict couldn't come at a better time for Proview.