CHINA: Apple settles dispute over iPad name with Proview Technology
Apple has settled a dispute in China over the rights to the 'iPad' name, paying Proview Technology in Shenzhen $60m (£38m).
This removes any further obstacle to Apple selling its iPad tablet in the vast Chinese market.
Apple said it had bought the global rights to the iPad name from Proview in 2009, but this was disputed by the Chinese firm (see story below).
Worldwide sales of Apple's iPad could be threatened by a dispute in China, where a company making monitors and TVs is claiming ownership of the iPad name for the Chinese market.
It's calling for a ban of imports and exports of the Apple tablet.
Shenzhen Proview Technology, acting on a Chinese court ruling last December upholding its claim to the iPad name, has already asked retailers in 20 Chinese cities to stop selling the iPad, under threat of seizure of stock.
It has also filed lawsuits against Apple in both Shenzhen and Shanghai.
Those call for a ban on imports to, and exports from, China of the iPad – and while this could impact on Apple's launch of its tablets in one of the world's largest market, the consequences could be even more far-reaching.
After all, iPads for worldwide consumption are made in China, and a ban on exports would effectively cut off Apple's supply lines, just at a time when the Apple fan sites are abuzz with rumours that a new iPad 3 is set to be launched at the beginning of next month.
The right Proview?
Shenzhen Proview registered the iPad name in China in 2001. Apple says it bought 'Proview's worldwide rights to the iPad trademark in 10 different countries several years ago', but the company from which it bought those rights is Taiwan-based Proview Taipei.
Although the Taipei company is associated with the Chinese one, Shenzhen Proview says Proview Taipei had no authority to sell the rights to the name for China. In other words, it claims Apple bought something the vendor had no right to sell.
Apple is appealing the December rejection of its claim to rights to the name in China.
The irony of the claim is that an export ban would be enacted under laws designed to help companies stop the shipping of counterfeit goods from China to world markets, and which were put in place largely as a result of pressure from foreign brands to stop counterfeiting.
Now it seems a Chinese company is using the law to take on a Western technology brand of the kind it was designed to protect.
It's not know what kind of settlement Proview is seeking in the matter: the company's lawyer says that , 'We are now focusing our work on upholding rights and haven't made negotiation proposals to Apple yet.'
However, it's hard to see any other outcome other than a financial deal between the two companies: after all, Apple is a much larger company than Proview, and it's hard to imagine the Chinese company finding anyone else interested in buying its Chinese rights to the iPad name.
The move also comes at a time when Apple is responding to claims of poor worker conditions at the factories where it makes iPads and iPhones: owned by Taiwan-based Foxconn, these are all in southern China, including Shenzhen.
Apple has recently announced that an audit of conditions in Foxconn's factories, carried out by the Fair Labor Associtaion began today at the company's massive Shenzhen plant.
Some analysts have suggested that the costs of improving the conditions of workers in these plants could impact on their cost-effectiveness as centres of production for companies such as Apple, and the many other consumer electronics brands using them.
Prices could be increased, or brands may even seek new, lower-cost centres of manufacturing.