updated 03:00 am EST, Thu February 23, 2012
Bank of China, Minsheng controlled company
Court documents have revealed that the trademark battle between Apple and failed Hong Kong display maker Proview is not just between the two parties, but by the banks the company now says were controlling Proview at the time the deal for the rights to the "iPad" trademark was struck. Proview was already in receivership, and the creditors did not sign off on the agreement, company officials now claim.
Apple says the charges are simply not true, and has already produced documents that swayed a Hong Kong court to rule in their favor after losing the first round in Shenzen Intermediate People's Court. The current court case is likely to be the deciding factor, though either party could possible appeal to the Chinese Supreme Court depending on the verdict in the current case.
The tablet maker has documents from trademark organizations in China showing that both the Shenzen and Taiwan branches of the company were aware of the transaction, which Apple conducted using a dummy corporation called IP Application Development Limited or IPADL. Documents signed by the company's outside legal counsel of the time (who represented himself as Proview's "director and lawyer" of Proview Technology Shenzen) show that Apple was indeed buying the trademark for the term "IPAD" in a total of ten countries, including China.
News that two of China's largest banks were controlling the company at the time and may not have been properly involved in the sale of the trademark may explain why Proview has been slow to negotiate a settlement on the matter rather than fight its now third lawsuit on the issue. Both Proview and the banks may be hoping that the threat of a Chinese import and export ban (which, since the iPad is made almost entirely in China, would amount to a global ban) may be enough to force Apple to pay a much higher price to re-buy the trademarks, which Proview originally sold for around $55,000 when it thought it was dealing with a smaller company.
Proview at one time made a device called the IPAD, which they marketed many years before Apple's 2010 debut of the iPad tablet. The original IPAD stood for Internet Personal Access Device and looked a lot like an iMac, but was in fact a terminal station with a touch-screen display.
Apple's position is that it properly conducted the sale of the trademark and that any lack of communication between branches is Proview's problem. Government documents show clearly that Apple was assigned the iPad trademark in December 2009, just a month before it announced the product that would go on to earn the company over $20 billion in just the last year.
Proview's latest position is that the Taiwan division improperly sold off the trademark without authorization from either the company headquarters or its creditors, and that Apple simply didn't grasp the nature of the relationship between the Shenzhen trademark holder, its banks and the courts. It's unclear how the argument could mean that Apple should lose the trademarks it negotiated in good faith. Even if Proview's latest account of the transaction is true, the blame for the snafu falls to Proview for failing to properly inform Apple that the Taiwan division wasn't authorized to handle the transaction, or for allowing the transaction to go through and stand for over a year before filing its initial complaint.
Documents in the case show that Proview's Shenzen lawyer explained to Apple that the negotiations must be concluded in Taiwan because the Shenzen division didn't have the rights to sell the name -- the literal opposite of what the company is now claiming. Proview has filed complaints with at least four provincial Chinese courts, as well as applied for a customs ban.
The case before the Higher People's Court of Guangdong is scheduled for February 29th. In addition to the documents and previous court win, Apple also argued during a contentious hearing yesterday that a ban on iPads would be severely detrimental to China's own economy and reputation with manufacturers. Through its suppliers, Apple employs well over a million people who work on its various mobile devices, and the factories where iPads and other electronics are produced play a major role in China's economy.