Posted by: China Media LAB on Jul 02, 2012
APPLE Inc has agreed to pay US$60 million to Shenzhen-based Proview to end a dispute over the iPad trademark on the Chinese mainland that started two years ago.
Both sides reached the settlement agreement on June 25 and Apple had transferred the funds to the account of the Higher People's Court of Guangdong Province, the court said on its website today.
Apple China was not available to comment today.
The settlement cleared the biggest obstacle for Apple to launch its latest iPad in the domestic market. The Chinese mainland will become one of the last regions to get the third-generation iPad, which debuted in the United States in March.
Analysts said this is rare as China is Apple's second biggest market after the US.
The settlement value won't greatly affect Apple because it only accounts for 0.45 percent of Apple China's revenue in its 2011 fiscal year, which ended on September 30.
Proview, which is heavily in debt, was hoping for compensation anywhere from US$400 million to US$3 billion.
Proview's lawyer Xie Xianghui said today the company's debts are about US$400 million and the company may go bankrupt. Its creditors include several state-owned banks.
"It's less-than-expected but it's a realistic result (for Proview) to accept," Xie told Sina.com.
The dispute centered on whether Proview's Taiwan unit, which Apple paid 35,000 pounds (US$54,800) in 2009 to use the iPad name on the Chinese mainland, had the rights to sell it.
At the beginning of the year, Shenzhen-based Proview sued Apple and asked domestic retailers to stop selling iPads.
Later the Chinese government intervened and the Higher People's Court of Guangdong Province worked to arrange a settlement.
It was a warning for firms doing business in China to focus on trademark ownership. The value of related cases will rise after the Apple-Proview case, lawyers said.
For example, Chinese home appliance maker Haier has registered iTV as a trademark on the Chinese mainland. Apple is widely expected to launch televisions and many expect the company to use iTV as the name for the products.