October 27, 2010 8:21 pm

Apple faces legal action over iPad name

Proview, a struggling Taiwanese-owned company, has threatened to sue Apple for alleged trademark infringement, in a lingering dispute that illustrates the complexity of branding in far-flung markets.

“We will sue them for damages in China and in the US,” Yang Rongshan, Proview’s chairman, told the Financial Times.

If Proview does pursue legal action, trademark experts said Apple could face additional costs in selling its iPad tablet computer in China, where Proview claims rights.

Proview is a contract manufacturer of flat screens that made an unsuccessful attempt almost a decade ago to market a tablet computer it called I-Pad.

The company registered trademarks for the IPAD name in the EU, China, Mexico, South Korea, Singapore, Indonesia, Thailand and Vietnam between 2000 and 2004, trademark databases show.

However, in pending cases in Hong Kong and Shenzhen, Apple won preliminary injunctions to stop Proview from selling off the IPAD name, according to people involved in the cases.

They said the courts had not yet reached the issue of ownership. Apple said it would not comment on pending litigation.

According to Mr Yang, Proview Electronics (Taiwan) agreed in 2006 to sell the “global trademark” for the IPAD name to a US-registered company called IP Application Development (IPAD) for £35,000 ($55,104). Proview did not at the time suspect the company had any link with Apple.

However, Mr Yang claims that the trademarks for the Chinese market were not included in that agreement. These were filed in 2000 by Proview Technology (Shenzhen), another affiliate of Proview International, the group’s Hong Kong-listed holding company, rather than by the Taiwan unit.

“It is arrogant of Apple to just ignore our rights and go ahead selling the iPad in this market, and we will oppose that,” Mr Yang said. “Besides that, we are in big financial trouble and the trademarks are a valuable asset that could help us sort out part of that trouble.”

A group of Chinese creditor banks seized the assets of Proview’s Shenzhen unit, including the trademarks, after the company defaulted on loans worth $400m.

Mr Yang said both Proview’s shareholders and creditors were eager to see the trademarks sold at the highest possible price – but this action has been blocked by the preliminary injunctions granted after Apple and IP Application Development sued Proview.

Apple’s suit seeks an order requiring Proview to assign the IPAD trademarks for China to IP Application Development, pointing to the 2006 agreement.

But according to online trademark databases, the ownership of the EU trademark for IPAD changed from Proview to Apple this year. Two IPAD trademarks registered in China are still shown as belonging to Proview.

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