China faces conflict between law and business in dispute over iPad trademark

BEIJING — Chinese officials face a choice in Apple’s dispute with a local company over the iPad trademark — side with a struggling entity that a court says owns the name or with a global brand that has created hundreds of thousands of jobs in China. Experts say that means Beijing’s political priorities rather than the courts will settle the dispute if it escalates.

Shenzhen Proview Technology has asked regulators to seize iPads in China in a possible prelude to pressing Apple Inc. for a payout. There have been seizures in some cities but no sign of action by national-level authorities.

Proview has a strong case under Chinese trademark law, but that could quickly change if Beijing decides to intervene to avoid disrupting iPad sales or exports from factories in southern China where the popular tablet computers are made, legal experts say.

Cisco Systems Inc., the maker of networking hardware, had owned the trademark since 2000 and used it for a line of Internet-connected desk phones. Cisco sued, the companies reached an undisclosed settlement and the phone launch went off as planned.

A Hong Kong court ruled last year that Apple’s agreement with Proview was valid, but that case is still pending on the Chinese mainland. Court documents uncovered by Dow Jones suggest on Dec. 23, 2009, Apple of California bought the rights to the iPad trademark from Proview in South Korea, Thailand, Singapore, and China for a paltry sum of about $55,494 in today’s dollars. Proview waived its right to sue for past infringements and passing off.
Source

Boils down to this. Proview owned the IPAD name, they sold the international rights to that name to Apple in 2009. Then, it appears some sort of shell-game was played, where Shenzhen-based Proview claims that the deal that was inked, signed and agreed upon in Hong Kong was done without the Chinese affiliates permission. Apprarently, Apple signed the deal in "good faith" that the sellers were authorized to sign the contract and accept the payment that was made.

Out of sheer coincidence, Proview is in the midst of bankrupcy and desperately needs some money to bail themselves out. Funny thing is that the price for the iPad trademark was $1.5 Billin a week ago, now it's grown to $2 Billion. No word as to why the price went up $500 Million in a week.

Apple’s Pattern Of Willful Trademark Infringement

26. Although Apple aggressively protects its trademark rights, Apple has a longand well known history of knowingly and willfully treading on the trademark rights of others—a history which began as early as the 1970s when Apple was first sued fortrademark infringement by the Beatles record label, Apple Corp. Although the case wassettled on the condition that Apple not enter into the music business,
Apple entered intothe music business in the 1990s and was sued again.

27. Apple’s early flagship product—the Macintosh computer—also ran afoul of the trademark rights of both McIntosh Labs, a high-end stereo equipment maker, and asoftware company named Management and Computer Services, Inc. (MACS). Apple’sformer CEO John Sculley reported that
Apple paid nearly $2 million (nearly 3 decadesago) to extricate itself from the legal mess it created by its adoption of the Macintoshlabel.

28. Apple was sued another time for trademark infringement due to its adoptionof the name “Mighty Mouse” for computer devices despite Terrytoon’s famous trademark for the cartoon character of the same name.

29. In more recent times, Apple has been sued for its use of various marksemploying the “i” prefix in connection with various wireless technology goods andservices. For example, Apple was sued by Cisco Systems, Inc. (“Cisco”) in 2007 fortrademark infringement arising from Apple’s introduction
of the iPhone. Cisco, whichowned the mark “iPhone,” and Apple had been in licensing discussions for two years prior to the launch of the iPhone. Nonetheless, Apple ignored Cisco’s trademark rights and announced the iPhone without first reaching any agreement with Cisco.

30. Upon information and belief, Apple also began using “iPad” withoutseeking a license from Fujitsu Frontech North America, which had previously used and had pending before the United States Patent and Trademark Office an application for theiPad mark.

31. Most recently, in May 2010, Apple was sued by Innovative Media Group,LLC (“IMG”) for infringement of IMG’s federally registered “iAds” trademark afterApple launched its “iAd” mobile advertising program.

32. Apple’s announcement and launch of its “iCloud” cloud computing serviceappears to be just one more example of Apple’s “act first and worry about theconsequences later” approach to trademark use as even the most cursory Internetsearch—which could have easily been conducted by any of the legion of Apple’s in-house marketing or legal staff—would have revealed the prior, long term usage of
the iCloud Marks by iCloud Communications

33. Moreover, as was the case of the “iPhone” and “iAd” marks, Applediscreetly applied for a foreign trademark registration for ICLOUD months prior to the launch announcement on June 6, 2011 (Apple applied initially in Australia for iPhone,Canada for iAd and Jamaica for iCloud). That foreign ICLOUD application appears tonow form the basis for the various iCloud applications for which Apple filed in theUnited States on June 1, 2011. Apparently, Apple is attempting to use a foreign jurisdiction’s laws to gain priority for its U.S. registrations while circumventing thenotice and publication
requirements for trademark applications filed here in the UnitedStates with respect to “intent-to-use”
applications.

icloud v apple Complaint June 9, 2011, pp 5 - 9
http://www.scribd.com/doc/57544701/iCloud-Complaint

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