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iPads seized in China over trademark row

February 13, 2012|By David Pierson
  • Chinese customers with iPads last year in an Apple store in Beijing.
Chinese customers with iPads last year in an Apple store in Beijing. (Ng Han Guan / Associated…)

Reporting from Beijing — An obscure Chinese company’s battle with Apple Inc. over who has rights to the iPad name took another unlikely turn after authorities in northeastern China seized dozens of the Apple tablets for trademark infringement, an attorney for the company said.

The seizures in Shijiazhuang, capital of Hebei province, were in response to a complaint filed by Proview Technology, a company based in the southern Chinese city of Shenzhen which has stymied Apple’s bid to secure the trademark in China for its hot-selling device.

In December, a court in Shenzhen unexpectedly rejected a lawsuit by Apple claiming it was the rightful holder of the iPad name.

Since then, Proview Technology has filed complaints in 20 cities, urging authorities to prohibit the U.S. tech giant from selling or marketing its device. The company has also filed lawsuits against Apple and separate retailers in Shanghai, Shenzhen and Huizhou, a city in southern Guangdong province.

“You’ll likely see more and more actions across the country,” Xie Xianghui, a lawyer for Proview Technology, said in a phone interview Monday. “Apple did not follow Chinese law, so we’re confident the authorities will side with us.”

That could prove a setback for Apple, which is enjoying explosive growth in China. Last year, Apple CEO Tim Cook described the emerging consumer market as “key” to the company’s impressive earnings. So strong is the clamor for Apple products that a riot nearly erupted during the official release of the iPhone 4S in Beijing last month.

A spokeswoman for Apple in China declined to comment Monday.

Proview Technology is in a decidedly different position. The financially troubled firm is loosely affiliated with a parent company, the Taiwan-owned Proview International Holdings, which manufactures flat-screen displays and is traded in Hong Kong.

Proview International registered trademarks for the name IPAD in Europe, Mexico, China and other parts of Asia starting in 2000. The plan was to launch its own hand-held tablet, but that proved unsuccessful.

Proview International instead chose to sell the IPAD trademark to a company linked to Apple for $55,000 in 2006. Apple thought that included the rights to China, but that trademark was still in the hands of Proview International’s Shenzhen subsidiary, Proview Technology.

The hope was that Apple would pay a significant sum for the trademark to help dig Proview Technology out of its debt.

Filings with Hong Kong’s stock exchange in 2010 showed the company’s chairman, Yang Rongshan, had filed for bankruptcy and owed creditors more than $500 million.

“Apple is not willing to talk with us anymore,” said Xie, the company’s attorney. “That’s why we feel we have to turn to all these tactics to fight for our rights.”

It remains to be seen whether more local authorities will side with Proview Technology. Xie said a district in western Beijing (which houses one of the two official Apple stores in the city) had initially agreed to fine Apple about $39 million. However, the penalty was suspended pending Apple’s appeal of the Shenzhen court’s decision.

Xie said he confirmed with officials at Shijiazhuang’s Administration for Industry and Commerce that the iPad seizures were the result of his client’s complaint. News of the crackdown was first reported in the Hebei Youth Daily on Monday.

An official at Shijiazhuang’s Administration for Industry and Commerce declined to comment.

At least one store owner in Shijiazhuang said he was nervous about being sued and hoped to sell his remaining dozen iPads quickly.

“Other stores have already taken them off the shelves,” said a manager at Taihe Electronics City who only gave his surname, Zhang. “After we've sold all of them we won't be selling any more iPads.”

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