China Firm Aims to Turn Court Win into Ban on iPads
Shenzhen Proview is now seeking to leverage a December court ruling on its ownership of the “iPad” name into a nationwide injunction against the export and import of Apple iPads. Shenzhen Proview had registered the iPad trademark in 2001, long before Apple purchased the right to use it from another arm of the Proview company.
The Shenzhen court ruling has already been used by the city of Shijiazhuang, capital of Hebei Province, to seize about 45 iPads from retail outlets on Monday. Further seizures were apparently foiled by the retailers hiding their stocks of iPads.
On Tuesday officials in Xuzhou, a city of 1.8 million in prosperous Jiangsu Province, have begun “temporary impoundment” — seizures — of iPads from Apple retailers.
Proview has been pressing officials in over 20 of China’s major cities to begin similar seizures to prevent Apple from violating its trademark rights over the iPad name. It has also filed a request with the General Administration of Customs in China to block iPad exports. If the request is granted Apple’s global iPad sales would be halted since virtually all iPads are currently being produced in Chengdu and Shenzhen by its manufacturing contractor Foxconn.
The moves are thought to be part of an effort to pressure Apple into a large settlement before various appeals and litigation in other courts can lead to possibly more favorable outcomes for Apple.
Proview’s tactics are made possible by China’s sweeping intellectual property laws that lets the Chinese government ban worldwide sale of made-in-China products found to violate a Chinese patent, trademark or other intellectual property right. Consequently, foreign firms live in dread of losing an intellectual property case in China as it could cripple their entire supply and distribution chains.
The biggest protection that Apple has against drastic measures that can cripple its business is political pressure by the US. As China’s second largest export market, the US too can exert considerable pressure on China to treat American companies fairly or face retaliatory measures against Chinese exports.
Hong Kong-based Proview was once a leading display maker. It went into swift decline in 2009 and was delisted by the Hong Kong stock exchange in 2010. In 2000 it trademarked the IPAD name in several countries with the intention of using it for a web-based hand-held tablet computer — a description that applies to Apple’s iPad. Apple bought the rights to the name from Proview’s Taiwanese subsidiary but apparently failed to perfect its title by including the Shenzhen Proview branch in the agreement.