Chinese Tech Company Suing to Ban iPad Exports

A Chinese tech company is seeking to prevent exports of iPad computer tablets, according to Fox Business. Proview Technology, a tech firm headquartered in Shenzhen, China, claims that it owns the trademark for iPad. The company is asking Chinese customs to block iPad shipments to and from China.

Apple Inc., manufacturer of the iPad, will be severely affected by this move if it is successful. China is not only a large production base for the iPad, it is a major consumer market for Apple products, which also include the iPhone and iPod. Proview is represented by the Grandall Law Firm in Shenzhen. Apple is not currently negotiating with Proview in this matter, according to attorney Xiu at Grandall. Chinese customs have declined to comment on this case.

This matter highlights the legal challenges that multinational companies face when operating in China. Apple already lost a case with Proview in 2011, in which the district court in Shenzhen ruled that the iPod trademark belongs to Proview. Apple has appealed this ruling, claiming that it had already purchased the rights to the iPad trademark. The High Court in Guangdong is scheduled to review the appeal on February 29, 2012, and that ruling will not be subject to further appeal. If Apple loses the appeal with the Guangdong High Court, its only legal options will be to settle with Proview or face enforcement actions that will be financially devastating.

Proview has petitioned the authorities in Shijiazhuang and approximately 20 other Chinese cities to block iPad sales. The company is also suing retailers in Futian and Huizhou. Furthermore, Proview is suing Apple directly for trademark infringement in Shenzhen and Shanghai. Proview’s claim is for 10 billion yuan, which is currently equal to about $1.6 billion in U.S. dollars. Apple will be in an extremely poor legal position if it loses these cases, according to professor Stan Abrams. Abrams is a law professor in the Department of Finance and Economics at Beijing’s Central University.

Elliot Papageorgiou is an executive partner at Rouse Legal in Shanghai who provides two possible interpretations of Apple’s legal strategy. The first view is that the Apple’s attorneys simply missed the trademark infringements issue. The second interpretation is that Apple needed to use the iPad trademark in China for sound business reasons, despite its legal challenges.

For fans of the iPad, a ruling against Apple could mean many things, not the least of which might be an increase in the price of this popular gadget. After all, Chinese factories are able to produce iPads much less expensively than American factories can. However, for those who want to be able to surf the Internet or look up fun Chicago attractions on the fly, this will likely not be a problem, nor will it adversely affect Apple sales. Only time will tell.