Post date: Monday, 2nd July 2012

Apple pays out $60m to settle iPad trademark dispute in China


In a twist on the usual copyright disputes between aggrieved Western companies and rivals in emerging markets, a Chinese firm has won its fight against Apple over the use of the iPad name.

In a court settlement, the computer giant has agreed to pay $60m (£38m) to Chinese firm Proview, which said it owned the rights to the name in the Chinese market.

It had registering ‘iPad’ in 2000, but Apple countered that it had acquired the worldwide rights for the name in 2009.

After Guangdong High People's Court had asked the firms to reach a settlement, it issued a statement saying: "The iPad dispute resolution is ended."  

"Apple Inc., has transferred $60m to the account of the Guangdong High Court as requested in the mediation letter."

Apple had originally bought the global rights to the iPad from Proview's Taiwanese affiliate for £35,000.

But the Chinese firm insisted that the affiliate did not have the rights to sell the iPad name rights for China, one of the highest-growing markets for Apple.

The dispute meant Apple's iPads being removed from the shelves in some parts of China.

Proview had even sought a ban on the sales of the product in Shanghai as part of the dispute, a move that was rejected by the courts.

"The case is settled, both sides are satisfied with the agreement," Ma Dongxiao, a lawyer from Shenzhen Grandall Law Firm, which is handling Proview's case told the BBC.

Apple is starting to face increasing competition in China from rivals such as Samsung, and experts believe that one of the key reasons behind the company agreeing to settle the dispute is that the firm didn’t want its sales in the country to be disrupted and lose market share.

"When Apple is on the receiving end of a litigation, especially in China, it is a sensible move for them to settle it and move on," Andrew Milroy of Frost & Sullivan told the BBC.

"That would help minimise the disruption to the Apple juggernaut."

The dispute between the two firms over was not limited to China.  Proview claimed Apple set up a special company in Roydon, Essex to acquire the rights to iPad name, and Proview had also lodged a case against Apple in the US.

It had accused Apple of deceiving it into selling the rights to the name by setting up a company, IP Application Development Ltd (IPADL) in the UK.

It claimed that Apple said the trademark was "an abbreviation for the company name".

However, that case was dismissed by the court earlier this year. Analysts said that with the two firms agreeing to a settlement in China, it was unlikely that Proview would take any further action against Apple.


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