China to Apple: Pay Up!

Came across an interesting article about the Apple Ipad …Pad?

Photo courtesy of techcrunch.com

So what’s going on:

Apple is currently in a dispute with Chinese company Proview, over the ‘iPad’ trademark. In 2001, Proview trademarked ‘iPad’ in several countries before Apple bought it from them in 2009 for $55,000. Proview is now demanding $2 billion from Apple in compensation.

What the companies have to say:

• Proview claims that the complete sale of the trademark to Apple was not authorized, but Apple has documentation refuting that claim.

• Although Apple does have documentation, they still may have made a mistake. There are two Proviews: Proview (Shenzhen) and Proview (Taiwan). It seems that Apple may have bought the trademark from Proview (Taiwan) when Proview (Shenzhen) is the company that actually owns it. If this is the case, then Apple has potentially juiced themselves of billions of dollars.

• After the case being suspended in China, Proview has moved the case to the California courts.
  • Now they are claiming that Apple approached them as a fake company called IP Application Development Ltd., or IPAD. It is under this name that Apple supposedly applied for the ‘iPad’ trademark to be used as an abbreviation of the company name. If this is true, Apple could lose their rights to sell iPads in China, a huge market for them.

• Apple is turning the tables and going after Proview for defamation and copy infringement.

This story sheds light on the other crisis Apple is currently facing in China regarding the working conditions of its Foxconn factories in correlation to the string of employee suicides. You can read more about that crisis here.

Proview IPAD (Photo courtesy of allthingsd.com)

My thoughts:

It seems like Proview may be regretting their earlier decision to sell the trademark for a few thousand when it has generated millions for Apple. I mean, I can’t blame them for trying to make up some (well all) of the money they lost but it just looks desperate now that it’s eight years later.

Now, if Apple really did use a fake company name to buy the trademark, then that’s even worse. Apple just beat out Google for the #1 spot of ‘Most Respected Brand,” so something like this would definitely bring some negativity to their title. This could result in losing their China market, which would definitely negatively impact their sales. This just shows that you have to honest from the very beginning because the truth will eventually show its face.

Not to mention the potential that they may have been the ones who made the mistake of buying from the wrong company. As I mentioned above, they’re already facing a crisis in China and it doesn’t seem to be getting them anywhere positive. I guess I’m just surprised that all of sudden Apple is attracting negative publicity.  Has their PR team been slacking all these years and we just haven’t seen it or does China just want to take a big bite out of Apple this year?

Another great question is: will Apple settle or ride it out to the very end?