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Technology giant Apple is considering its next step after losing a court case in Shenzhen over the ownership of its iconic iPad trademark.
The lawsuit was filed by Apple against Shenzhen-based company Proview Technology before the Intermediate People’s Court of Shenzhen at the beginning of 2010, alleging infringement of its iPad trademark.
Earlier this week, the court rejected the lawsuit, ruling that Proview Technology is the lawful owner of the registered iPad trademark in China.
Proview Technology was represented by partner Xiao Caiyuan of Shenzhen’s largest law firm Guanghe, while Apple turned to lawyer Yang Hao of Shenzhen firm Shendadi.
In 2000, Proview Electronics, the Taiwan parent of ProviewTechnology, registered the trademark of iPad in many countries and its Shenzhen subsidiary ProviewTechnology registered the trademark in China. In 2006, Apple reached an agreement with the Taiwan entity to buy the global trademark for iPad for £34,000, including the trademark in China.
At the heart of the dispute is whether the agreement Apple signed with Proview Electronics (Taiwan) is binding for the registration of the trademark in China.
Apple argued that the agreement with Proview Electronics for the ‘global trademarks’ gave them the right to the trademark in China. However, the Shenzhen court ruled that the trademark was registered back in 2000 by a separate Chinese entity, Proview Technology Shenzhen. The court ruled that as Proview Shenzhen was not a party to the agreement Apple has no grounds to claim rights over the iPad trademark in China.
“The implication of this decision for Apple is significant given the potential size of the China market for Apple’s iPad,” said Luke Minford, the UK country manager of IP firm Rouse & Co, who has spent 14 years in China.
“What rights owners can learn from this is that when negotiating a global agreement of this nature it is important to understand the status of the owner of the rights in China and ensure that it is made a party to the agreement if it is not already,” said Minford. “China is a civil law country and many foreign companies fall into the trap of assuming they have rights when they don’t. It’s a timely reminder that global IP strategies can’t always be rolled out to China without careful adaptation.”
Apply is yet to decide whether it will appeal the decision. It is understood that Proview has hired Grandall Law Firm partner Xie Xianghui to sue Apple resellers in Shenzhen, aiming to block the sales of iPads. It is also suing Apple for Rmb10bn (£1bn) over the alleged trademark infringement. However, a spokesperson for Proview stated that the company is open to settlement.