Apple May Face iPad Export Ban in China

Proview International Holdings has asked authorities to ban Apple’s exports because it claims ownership of the trademark to Apple’s latest best-selling gadget.

A Chinese tech firm that claims it still owns the iPad trademark will seek a ban on exports of Apple Inc's computer tablets from China, which could deal a blow to the U.S. technology giant's sales worldwide. Photo: Leon Lee/Flickr

Proview Technology (Shenzhen) Co Ltd is petitioning Chinese customs to stop shipments of Apple’s popular iPads in and out of China, but has not received a response, lawyer Xie Xianghui told Asian Legal Business, reports Reuters.

The dispute with Proview, which won a court ruling that it owns the iPad name in China, has resulted in authorities seizing iPads from retailers in one city. Proview said it has asked for enforcement in 30 other cities.

All of Apple’s iPads are manufactured in China, meaning global sales of the popular tablet computers might be affected if authorities agreed to enforce such a request by Shenzhen Proview Technology.

According to the UK’s Telegraph, Apple said that it acquired the rights to the trademark from Proview for ten countries, including China, and that Proview “refuses to honour their agreement with Apple in China.”

“We bought Proview’s worldwide rights to the iPad trademark in 10 different countries several years ago. Proview refuses to honor their agreement with Apple in China,” said an Apple Inc. spokeswoman in Beijing, Carolyn Wu.

Apple could be in a very difficult situation if it had mistakenly bought rights from the wrong Proview subsidiary, said Thomas Chan, a Los Angeles-based attorney who has represented companies in trademark licensing negotiations with Apple.

“They’ve got a real, real problem,” Chan said. “They’re going to pay through the nose.”

Shenzhen Proview Technology registered the iPad trademark in China in 2001. Apple bought rights to the name from a Taiwan company affiliated with Proview but the mainland company says it still owns the name in China.

According to The Huff Post, a Chinese court rejected Apple’s claim to the name in China last year. Apple has appealed.

“We are now working on a request to China Customs to ban and seize all the import and export of the iPad products that have violated the trademark,” said Xie Xianghui, a Proview lawyer. He gave no indication when the request might be filed.

Apple’s options are limited to either settling with Proview Technology (Shenzhen), appealing to a higher court, or facing devastating enforcement actions in China, legal experts said.

“There are two views we can take here. One view is, Apple was not sufficiently prudent and therefore, this was missed by Apple and its attorneys,” said Elliot Papageorgiou, a Shanghai-based partner and executive at law firm Rouse Legal (China).

“A more charitable view would be that, Apple said that for business reasons we need to use this brand and as far as the name in China is concerned, let’s cross the bridge when we come to it,” he said.

Local media reported recently that Proview was taking legal action, seeking up to 10 billion yuan ($1.6 billion) in compensation from Apple for trademark infringement.

“Without a win in that Shenzhen case, all the other actions, whether it is administrative or with different courts, customs, Apple is not in a good position at all,” said Stan Abrams, an IP law professor at Beijing’s Central University of Finance and Economics.

Proview’s attack comes during an already testing week for the Californian company. On Monday, Apple allowed independent inspectors into its manufacturing facilities in China following heavy criticism over the working conditions of employees.

The team of inspectors from Fair Labor Association began inspections on Monday at Apple manufacturing plants run by FoxConn, the biggest electronics manufacturer in the world.

Chinese rules allow trademark owners to request seizure of goods that violate their rights, according to Stan Abrams, an American lawyer who teaches intellectual property law at Beijing’s Central University of Finance and Economics.

The rules were enacted partly in response to foreign pressure for Beijing to stamp out rampant unlicensed copying of foreign movies, music and designer clothes. Abrams said exports can be seized under rules meant to prevent manufacturers in China from sending unlicensed copies to other markets.

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