A Chinese provincial court announced in its official website on July 2, 2012 that the U.S. technology company Apple Inc. had settled a trademark dispute with a Chinese company by paying $60 million of settlement. According to the announcement, the settlement shall be transferred into a court-approved bank account and a court decision ordering transfer of two dispute-related registered trademarks from the Chinese company to Apple had been served to the China Trademark Office.
As early as 2000, a subsidiary of Proview International Holdings Limited, a Hong Kong based company (hereafter referred to as Proview International), in Taipei, Taiwan (hereafter referred to as Taipei Proview) registered the “iPad” mark in Europe and other countries on computer and other related goods. In 2001, the subsidiary of Proview International in Shenzhen, China (hereafter referred to as Shenzhen Proview) filed applications for the same mark in China on the same goods and obtained two registrations.
In December 2009, Taipei Proview signed an agreement with the company IP Application Development Limited agreeing to assign eight registrations for the “iPad” mark, including the two obtained in China, in the amount of £35,000. In April 2010, IPADL signed an agreement with Apple Inc. agreeing to assign the registrations in the amount of £10.
According to Chinese Trademark Law, to assign a trademark registration, a petition should be submitted with the China Trademark Office, supported by an agreement signed by the assignor, who shall be the recorded registrant for the mark, and the assignee. The assignment shall be recorded in the trademark gazette if it is approved. Without such record, assignment will not come into force.
Although Apple failed to complete the formalities to assign the two Chinese registrations, iPad products were launched in China in September 2010.
In March 2010, assets of Shenzhen Proview, including the two registrations for the “iPad” mark, were frozen by a court in Shenzhen at the request of eight creditor banks due to debt default.
In May 2010, Apple and IPADL jointly initiated legal actions in a court in Shenzhen against Shenzhen Proview, claiming ownership of the two registrations based on said agreements.
The defendant argued that Taipei Proview had no authority to assign trademark registrations in the name of Shenzhen Proview as they were legally independent companies.
After holding three court hearings, the court made a decision confirming that the assignment was not executed by Shenzhen Proview and rejecting the claims of Apple and IPADL.
Apple and IPADL appealed the decision to The Guangdong Provincial High People’s Court and a court hearing was held in February 2012.
The settlement came out after the authorities in at least two Chinese cities began seizing iPads in February. Probably due to the trademark obstacles, Apple has not officially launched its new iPads in China.
As Shenzhen Proview is in the process of insolvency, the settlement may be the last income for the company although it is far from the debt it owned.
This is Apple’s second settlement in trademark disputes with Chinese companies in Chinese market.
In 2002, Apple filed a trademark application with the China trademark Office for the mark “IPHONE” on “computer and computer software” goods. In 2004, a Chinese company filed a trademark application for the mark “i-phone” on “phone and mobile phone” goods. Once the latter application was published for opposition, Apple opposed. The opposition was denied on the basis that although the two marks were similar, goods designated for the two marks were not similar. After losing again in an appeal, Apple paid $3.65 million to buy the registered mark “i-phone”.
Obviously, early proper trademark registrations and well-attended due diligence saves money and time.
