Apple’s tablet PC iPad was an immediate hit among fans when it was launched last April. Within 60 days after the April 3 launch, it was reported by some foreign media that more than 2 million sets of iPad were sold, a sign of its craziness. However, together with the large sales volume came endless lawsuits. Trademark disputes have accompanied Apple from the rush for iPhone in 2007 to iPad in 2010. This must be Apple’s biggest headache while it is reaping the big profits.

As the owner of iPad trademark in China, Provi ew Inter national recently demanded from Apple 10 billion Yuan for the trademark, which aroused wide concern. On November 1, the eight creditor banks of Proview (Shenzhen) convened a meeting to discuss the negotiation with Apple on the trademark dispute. The eight banks present are Bank of China, Minsheng Bank, China Development Bank, Guangdong Development Bank, Bank of Communications, Shanghai Pudong Development Bank, Huaxia Bank and Shenzhen Ping An Bank. Since Proview’s assets have been frozen by the banks, the eight banks become the de facto beneficiaries of the mark iPad.

The search result on China Trademark Network shows that Proview (Shenzhen) is still the registrant of iPad, with the status as “Assignment Pending” current as of May 7, 2010. Yang Rongshan, a Proview officer, explained that if there was any assignment, it would be an internal one ---- from Proview International to a subsidiary.

Founded in 1989, Proview International was one of the first Taiwan-based investments on the Chinese Mainland. The company was listed in Hong Kong in 1997, specializing in R&D, production and sales of flat panel TVs and computer monitors. According to its Notice, the net current liabilities of Proview International amount to 2.87 billion Yuan and its overdue loans reach 3.8 billion Yuan. Its liabilities to the above-mentioned eight banks reach USD 180 million. Moreover, all of the Proview International assets, including the trademark iPad, have been seized as mortgage to these banks. Therefore, the above-mentioned eight banks jointly held the meeting to discuss the rights and interests concerning this trademark.

The dispute over the iPad trademark dates back to 2000, when the Proview Taipei secured the IPAD mark in many countries, and in the Chinese mainland, in 2001, in the name of Proview Technology (Shenzhen) Co., Ltd.. As to initial intent and suspected bad faith in obtaining registration of the mark, Yang Rongshan responded by saying, “We are the original creator of iPad. In 2001, we published the new product at a news conference in Hong Kong, only to no avail.”

While developing iPad tablet PC, Apple started to negotiate with Proview International on trademark assignment. In 2009, Apple cut a deal with Proview International to buy out the global trademark rights owned by Proview Taipei with GBP 35,000. However, Proview International claimed that Apple’s purchase of iPad trademark was “despicable” and had “fraudulent act”. Lawyers involved also believed that the original deal was flawed and the contract was probably invalid, and would sue Apple in the United States. As a result, Apple’s iPad now faces trademark wars in both China and the USA. Apple has kept silent on its iPad trademark dispute in China.

IP lawyer Yu Guofu holds that it is easy to find out whether Apple has committed infringement from legal formalities. Even though Apple says that it has purchased the trademark rights including those for the Chinese market, as long as the relevant transfer documents are not completed at the Trademark Office, the trademark still belongs to its original holder.

Since the trademark transfer contract between Apple and Proview International falls into the field of economic dispute, it should be handled separately as another case. If Proview International can provide sufficient evidence to prove that iPad trademark still belongs to itself, it can seek damages from Apple. If it would transfer the mark, Proview International should obtain the consent of the eight creditor banks. Mr. Yu also believes when considering the amount of damages for trademark infringement, the court may not necessarily support the claim of 10 billion Yuan but will certainly consider the actual financial losses sustained by the plaintiff and other objective factors. In fact, since products like iPad are rarely seized, it is possible for the two sides to sit down and negotiate for settlement.

Industry observer Yang Qun also believes that the dispute between Apple and Proview International will be time-consuming and can not be resolved by public letter or other forms of external pressure in the short term. Yang Qun pointed out that China had no precedents for punitive damages in this field. Therefore, when considering the amount of damages, a court might take into account the infringement gains, or the losses suffered by the infringed plaintiff.

(Translated by Li Yu)