Chinese court says Apple pays $60 million to settle iPad name dispute with local company
Eugene Hoshiko, File/Associated Press -
FILE - In this Feb. 28, 2012 file photo, a man walks by an
advertisement of Apple’s iPad 2 in Shanghai, China. Apple has agreed to
pay China’s Shenzhen Proview Technology $60 million to settle a dispute
over ownership of the iPad name, a court announced Monday, July 2, 2012,
removing a potential obstacle to sales of the popular tablet computer
in the key Chinese market.
Apple’s dispute with Shenzhen Proview Technology highlighted the possible pitfalls for global companies in China’s infant trademark system. It also posed a challenge for the communist government, which wants to attract technology investors to develop China’s economy.
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“The iPad dispute resolution is ended,” the Guangdong High People’s Court said in a statement. “Apple Inc. has transferred $60 million to the account of the Guangdong High Court as requested in the mediation letter.”
China is Apple’s second-largest market after the United States and the source of much of the Cupertino, California-based company’s sales growth.
Proview hoped for more money but felt pressure to settle because it needs to pay debts, said a lawyer for the company, Xie Xianghui. He said Proview sought as much as $400 million and might still be declared bankrupt in a separate legal proceeding despite the infusion of settlement money.
“This is a result that is acceptable to both sides,” Xie said.
The dispute centered on whether Apple acquired the iPad name in China when it bought rights in various countries from a Proview affiliate in Taiwan for 35,000 British pounds ($55,000). The December court ruling said Proview, which registered the iPad trademark in China in 2001, was not bound by that sale, even though it was part of the same company.
The settlement should be good news for both Apple and its customers because it clears a potential obstacle for the company to start selling the new iPad 3 in China, said You Yunting, a lawyer for the DeBund Law Office in Shanghai.
“It is a good deal for Apple, because sales of iPads, which are in great demand, can compensate for this $60 million cost,” You said.
Apple has yet to announce a China release date for the iPad 3 but the country’s telecommunications equipment certification agency approved the tablet in May.
The case gave Chinese authorities a chance to show that their courts could impartially resolve intellectual property disputes but also raised the possibility that technology investors might be put off by a negative outcome for Apple. Chinese regulators said Proview clearly owned the mainland name rights under Chinese rules.
Without a formal ruling, it will be hard for companies to draw lessons about how Chinese courts will handle such disputes in the future, said Stan Abrams, an American lawyer who teaches intellectual property law at Beijing’s Central University of Finance and Economics.
www.washingtonpost.com/business/technology/chinese-court-says-apple-to-pay-local-company-60-million-to-settle-ipad-name-dispute/2012/07/01/gJQAP6a9GW_story.html
This will greatly discourage non-Chinese businesses from doing business in China. Since Chinese businesses are subsidized in multiple ways by the Chinese state they can get away with things like this in the Chinese Court system. So, the biggest outcome is discouraging businesses not Chinese owned from doing business there in China.
However, every country has strange laws protecting local businesses so on one level no one should be surprised. But few countries are as punitive to foreign businesses as China.
This will greatly discourage non-Chinese businesses from doing business in China. Since Chinese businesses are subsidized in multiple ways by the Chinese state they can get away with things like this in the Chinese Court system. So, the biggest outcome is discouraging businesses not Chinese owned from doing business there in China.
However, every country has strange laws protecting local businesses so on one level no one should be surprised. But few countries are as punitive to foreign businesses as China.