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Apple Could Lose Rights to iPad Name in China

Apple, Inc.'s capacity for contentious litigation with its competitors appears to be limitless as, due to a dispute China-based Proview Technologies, it could lose the rights to use the iPad name in the People's Republic of China. The dispute centers around Apple's purchase of the trademark back in 2009, when it paid a Taiwanese affiliate of Proview Technologies a dirt cheap $55,000 for the international right to the name. Apple asserts that this purchase entitles it to the use of the name in all markets including mainland China. Proview Technologies disagreed; their mainland operation, based in Shenzen and Hong Kong, registered the trademark in China in 2001, and have asserted in Chinese courts that their China operations are not bound by their Taiwanese affiliate's sale of the iPad brand internationally. In december, a Shenzen court agreed; that verdict is currently scheduled to be appealed in a Guangdong Province court on February 29.

Before that happens however, Apple will be facing off against Proview in a Shanghai courtroom on February 22. Proview hopes to win an injunction in that court which would affect all of Shanghai province. This could deal a crippling blow to Apple's China operations, as Shanghai is one of Apples biggets single Chinese markets, with 3 of the company's 5 Apple stores there. However, even if an injunction is successful, it would not take effect for months, during which time Apple would be able to appeal the decision. Furthermore, past action by China's government suggests that Apple can expect a great deal of support from Bejing. In the wake of previous victories in smaller jurisdictions, Proview requested that imports and exports of iPad be stopped by Chinese Customs. The government's response was that such a request would be hard to implement.

This may all be moot. Proview Technologies has suffered badly during the economic downturn. In 2010 trading of Proview shares was suspended in the Hong Kong stock exchange and if the company's fortunes don't improve it will be delisted in June. Making matters worse, photos appearing in the Chinese publication Caixin seem to show that Proview's Shenzen operations are abandoned and derelict. If true, these actions are merely a means of staving off collapse and likely to fail.