Chinese iPad could cost Apple $1.6 billion

Apple has lost its claim to own the iPad brand in China. The verdict now leaves it open to a $1.6 billion lawsuit.

In principle the case is extremely simple: a company named Proview technology registered the name “IPAD” as a trademark in Taiwan in 2000 and in China the following year. Given that even the iPod (not iPad) wasn’t publicly announced until October 2001, there’s no serious contention that Proview copied the name rather than created it.

The legal dispute didn’t center on who created the name, but rather on a 2006 deal when Proview sold the rights to use the name in Taiwan to an American firm named IP Application Development, which had been registering the term worldwide. That firm later turned out to be a dummy corporation controlled by Apple, apparently used to avoid tipping off competitors.

Apple went on to sue Proview’s subsidiary in China for continuing to claim the rights to the name in that country. It’s not entirely clear whether Apple believed the Taiwan trademark purchase also extended to the Chinese mainland, or if it was simply chancing its arm.

Either way, that lawsuit has now failed, with Shenzen’s Municipal Intermediate People’s Court declaring Apple does not have any trademark rights for the name in China.

To make things worse for Apple, Proview in China is currently under the administrative control of a management consultancy firm, appointed by banks to deal with the company being “on the brink of bankruptcy.” The verdict thus comes as something of a jackpot, with the consultancy’s boss Li Su saying he’ll be suing for what he calls “very clear” infringement by Apple in selling the iPad in China. He’s demanding 10 billion yuan ($1.6 billion) and suggests that figure could rise unless Apple halts sales in the country.

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