Transfer Pricing Associates

Apple iPad has Trademark Issues in China

post Wednesday March 14, 2012


The current Apple intellectual property law dispute has Chinese officials in a bind, forcing them to choose between a local business or with the global brand that has funded and launched hundreds of thousands of jobs in China. Experts believe that Chinese political priorities will settle the courts if the dispute escalates, but who knows when, and if, that decision will fall?

The Chinese company in dispute, Shenzhen Proview Technology, requested that authorities seize the Apple iPads before pursuing Apple to receive a payout. While some seizures have in fact occurred, there has, as of yet, been no national movement or attention by authorities. Chinese trademark law gives Proview a solid case, but given that the iPad is made in southern Chinese factories, the political authorities may seek to avoid disrupting sales and exports of the product.

The issue between the two companies breaks down to this: Apple acquired the iPad name in China when it bought rights in countries from a Taiwanese Proview affiliate in 2009 for about $55,000. Proview, which registered the name in China in 2001, won a ruling this past December in mainland China that it was not bound by that sale. The company allegedly does not seek to debilitate the company, only to receive a payout as Chinese news reports indicate that Proview is heavily in debt.

Apple encountered similar tensions in 2007 with the launch of the iPhone, but after a speedy settlement with Cisco Systems, the previous owner of the trademark, the launch went off, as as we know, continues to see success. China is currently Appleā€™s fastest growing market, and the company already has larger sales in China than any other country, except the United States. In China and Hong Kng, sales totaled $12.5 billion, about 12 percent of total revenue.

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