In a decision that could result in Apple, Inc. having to change the name of its iPad tablet computer in China, a court in southern China has dismissed a trademark lawsuit brought by Apple against a Shenzhen company, Proview Shenzhen. The Shenzhen Intermediate People’s Court held that the Chinese company is the lawful owner of the iPad mark in China. Apple (UK) IP Application Development Company Limited v. Proview Technology (Shenzhen) Co., Ltd., (Shenzhen Intermediate People’s Court, Dec. 6, 2011).
Proview Shenzhen is a subsidiary of Hong Kong-based Proview International Holdings Limited. In 2000 and 2001, long before Apple launched its iPad product, certain of Proview’s subsidiaries registered the marks “iPad” and “IPAD” in the EU, China, Mexico, South Korea, Singapore, Indonesia, Thailand and Vietnam. Proview introduced a tablet computer in 2001 under the I-PAD mark, which was not commercially successful.
In 2009, Proview’s Taiwan subsidiary entered into an agreement to sell the “global trademark” for the IPAD name to a UK company for approximately $55,000 U.S. The deal transferred all of Proview’s iPad trademark registrations, including two Chinese trademark registrations for iPad registered in 2001 by Proview’s Chinese subsidiary, Proview Shenzhen. The purchaser was connected to Apple and subsequently assigned the rights to Apple. Apple launched its iPad tablet computer in China in 2010.
In 2010, prior to launching its iPad tablet computer in China, Apple applied to have ownership of the two Chinese trademark registrations transferred to it. The Chinese trademark office rejected Apple’s request because the Chinese trademark registrations were not owned by the Taiwan subsidiary that assigned the trademarks, but instead were owned by Proview’s Chinese subsidiary, Proview Shenzhen. Thereafter, Apple sued Proview in China, seeking a declaration that the trademark assignment included the two Chinese trademark registrations. The court rejected Apple’s claim, holding that the trademark assignment was not binding on Proview’s Chinese subsidiary. In its holding the court explained that Proview Shenzhen did not sign the trademark transfer agreement, was not involved in the negotiations between the UK purchaser and Proview Taiwan and had not authorized others to dispose of its trademarks. Further, the court ruled that as the purchaser of the trademark, Apple bore “a higher duty of care” to make sure that the “necessary procedures for the transfer of a trademark” were completed. Proview has now sued Apple resellers in various parts of China, seeking to halt sales of Apple’s iPad tablets and seeking damages of approximately $1.5 billion U.S. Apple may appeal the ruling.