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What Do You Call a Chinese iPad?

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That’s the question that Apple (AAPL) executives may have to answer after a recent Shenzhen court ruling. Apparently, the Chinese company Proview has owned the trademark on “IPAD” since 2001.

Apple has had its share of problems in China, with fake stores popping up all over the place and the recent shutdown of one of its factories because of “unbearable odors.” Then again, the country accounted for almost 1/6 of the computer company’s revenues, says a September earnings report.

According to Shanghaiist, Proview registered trademarks for “iPad” and “IPAD” in 2001 to increase market share for its own products. Unfortunately, the company’s products were not successful and it has contended with liquidity problems since.

Proview went on to register the name in South Korea, Mexico, Indonesia, Singapore, the EU and a few other places between 2000 and 2004. In 2006, a Taiwan-based subsidiary of the company sold the trademark to a UK company that eventually sold it to Apple. However, the recent court ruling states that, because this sale came through a subsidiary, it does not actually grant the trademark to Apple.

Sounds confusing right?

Well, it kind of is. In a recent article, Business Insider goes into a lot of detail on Apple’s legal options. Basically the company can either sue Proview Taiwan for breach of contract in the trademark sale or sue Proview Shenzhen over the iPad trademark -- a trademark Apple doesn’t appear to own in China.

Meanwhile, Proview Shenzhen is suing Apple for Rmb 10 billion for trademark infringement, according to The Lawyer.

From the look of things, Apple has a pretty tough road ahead of them. Even if they win a breach of contract case with the Taiwanese Proview, the Chinese Proview can easily ignore the ruling. They’ll also have trouble winning any sort of trademark cancellation against Proview Shenzhen, because they trademarked iPad before iPads were on the market.

At this point, Apple may be stuck paying a lot of money for the trademark. Or they could change the name. This is by far the cheaper option but it risks a loss of market share among a booming Chinese demographic.

Of course, lots of products have been renamed and gone on to have long and successful lives. Just look at Google (GOOG), originally Backrub, or Pepsi (PEP), originally Brad’s Drink, or any of the items on this list.
POSITION:  No positions in stocks mentioned.