Apple Could Lose $1.6 Billion In iPad Lawsuit

redletterdave writes "Proview Technology, which currently uses the 'iPad' name on several of its products including computer monitors, stands to win up to $1.6 billion and an apology from Apple for allegedly infringing upon Proview's trademarked name to use on its bestselling tablet. Proview International, which owns subsidiaries Proview Technology in Shenzhen and Proview Electronics in Taiwan, originally registered the name 'iPad' in Taiwan in 2000 and mainland China in 2001. Proview eventually sued Apple in 2011, and even though the Cupertino-based company retaliated with a counter-suit of its own, Apple lost the case in local Chinese courts. Depending on the court's findings, Apple could be fined anywhere from $38 million to the $1.6 billion that Proview is seeking. In addition to the money, Proview also wants Apple to apologize. 'We have prepared well for a long-term legal battle,' said one of Proview's lawyers."

Comments

And Apple's Worried?

[eagle1361]

Not that $1.6 billion would hurt them much, but all they'd have to do is threaten to stop selling the iPad in China. At that point, the government will just make Proview go away.

Re:And Apple's Worried?

[sideslash]

I don't think directly or indirectly threatening the Chinese government is in Apple's best interests. All the government would have to do is threaten to shut down Apple's Chinese manufacturing facilities and they'd be back to square one. Given how defensive Apple is about their own trademarks, I do find the whole spectacle amusing now that they've been caught in hypocrisy on that count. With that said, I'm sure they'll work out a backroom deal of some kind, everybody will save face in some way, and life will go on.

Re:And Apple's Worried?

[jythie]

They did search. And paid the company for use of the name. The Chinese company seems to be trying to double dip.

Re:And Apple's Worried?

[mosb1000]

They are in bankruptcy right now. They're betting on this to save them. Bail them out essentially. Apple already bought the trademark from them (under another name), so I'm not even sure how they could have possibly lost this lawsuit.

Re:And Apple's Worried?

[thegarbz]

I don't think you quite know how the Chinese work. This is a country which turns a blind eye to entire corporations being cloned including multi story buildings and factories being made for phantom companies. Companies such as NEC existed in China for years unnoticed until NEC in America started getting warranty calls for DVD players, a product it doesn't make but none the less had its logo on it.

If Apple pulled out of China ... nothing changes. iPads would still be available on the grey market just like every other product. Now if Apple pulled PRODUCTION out of China that may be a different story entirely, but the reality is they don't have anywhere else to go, and this is not a decision a company can make on the short term.

Corporations lobby and threaten, that's about the extent of power over governments. In the west this lobbying works worryingly well.

Re:And Apple's Worried?

[Defenestrar]

No, this is the cost of doing business poorly. A trademark search needs to be international in scope if you plan on making an international product. On top of damages Apple should be prohibited from further infringement (rename the product in countries with a previously registered trademark). There was a similar debacle (within the US registry if I remember) over the iPhone. I think it was settled, but the infringing product (Apple's iPhone) should have been pulled off the shelves, relabeled, and future infringement explicitly prohibited. It seems that Apple only cares about IP when they can use it to keep others out of their business - the evidence here is that they don't even bother looking to see if they infringe in a direction they want to go.

Re:And Apple's Worried?

[Whatanut]

Actually, I would assume they did do a trademark search. They found that this company owned the trademark and bought it from them. However, this company claims that they didn't sell the trademarks for China and Taiwan. Just everywhere else.

Fine print...

Re:And Apple's Worried?

[Americano]

Here's more.

At the core of the dispute is a 2006 agreement in which Apple bought the iPad trademark from Taiwan's Proview Electronics for $55,000, by way of a front business known as IP Application Development. Proview says, though, that Apple didn't win the rights to the Chinese trademark, since those were owned by Proview Technology in Shenzhen, a subsidiary of the Hong Kong-based Proview International.

So it sounds like Apple perhaps fucked up and they didn't secure the rights in China like they thought they were, or the Taiwanese company deliberately misled them, waiting until they were in financial trouble to cash in this particular chip, and say "Surprise, you didn't buy the rights in China like you thought."

Whichever it is, I suspect it'd be easier and cheaper for Apple to simply buy the company and shutter it than it would be to pay 1.6 billion dollars and lose the right to use the name. Realistically, I think you can expect the companies to settle with Apple being granted the rights to the name, and Proview getting a nice chunk of cash for it.

Re:And Apple's Worried?

[Mikkeles]

'... but the reality is they don't have anywhere else to go,...'

How about Samsung in South Korea; Apple claims they already make iPads! ;^)

Re:And Apple's Worried?

[JDG1980]

you realize that Apple relies on cheap Chinese slave labor to make iPads at $499/ea, right? And if Apple pulled out of China they'd have nowhere else to go. America isn't an option because of labor regulations and an expensive workforce. iPads would be up at $1499 and still losing money, iPhones would be $1000 subsidized and America's economy would take a larger nosedive than China's. Brazil? They've already tried that and it's as bad as America.

Bullshit. The differences in manufacturing costs amount to a few dollars per unit. From the New York Times:

the cost, excluding the materials, of building a $1,500 computer in Elk Grove [California] was $22 a machine. In Singapore, it was $6. In Taiwan, $4.85.

So we're talking about $22, not $1000. You're off by over an order of magnitude. Sure, moving the supply chains from China to the USA would be a big challenge, but that's a one-time expense.

Re:And Apple's Worried?

[narcc]

America isn't an option because of labor regulations and an expensive workforce. iPads would be up at $1499 and still losing money

Bullshit See thisForbes article.

Using the correct labor costs of assembling an iPad 2 in the U.S., an iPad 2 made in the U.S would cost $445 ($325 for parts + $120 for labor), as opposed to a Chinese iPad’s cost of $335 ($325 for parts + $10 for labor). Assembling the iPad 2 in the U.S. and selling it for $729 would bring Apple’s gross margin down to 39%, not the 15.25% cited to by Mr. Thompson.

That a 39% margin vs. the current 54% margin.

Re:And Apple's Worried?

[dimeglio]

That might be true. I think Apple tries its best to avoid or settle trademark disputes but it's impossible to know about all of the products. What's funny in this case is the suit is originating from a country where knock-off products are common place and culturally entrenched. Even the Apple Store was copied. It's kinda ironic.

Re:And Apple's Worried?

[Dahamma]

It's not about hurting Proview, it's about hurting China's economy. If Apple threatens to move all of their device production out of China, that's incentive not to rule against Apple (or at least not rule on the order of $1B+). Some estimates say Apple subcontractors in China employ over 500,000 people building Apple products...

Re:And Apple's Worried?

[Anonymous Coward]

It was iOS. Apple also made an agreement with Cisco before using the name too.

It was also iPhone. Cisco also had a product called iPhone that they picked up from Linksys. Apple and Cisco had a trademark dispute about it a few years ago.

Re:And Apple's Worried?

[KhabaLox]

I expect (based on your info) we'll be seeing a massive influx of manufacturing from Apple, Dell, HP, et al.

How exactly to you reach that sarcastic conclusion based on what GP wrote? His/her point was that the non-material cost differential (I'm assuming this is including shipping the unit from Asia to the US) was about $17 per unit. Obviously when you'r selling tens of millions of units a quarter, this is not an insignificant sum.

But, that cost increase would not cause Apple to up prices 300% and be unprofitable, which was baseless assertion you made.

Re:And Apple's Worried?

[lgw]

Overall, manufacturing in America is growing, and is quite low cost - it's just all the new stuff is automated (so no associated jobs). You should expect a massive influx in electronics manufacturing sooner or later. Meanwhile, the manufacturing economy in China is collapsing (China loses far more jobs to robots every year than it gains from outsourcing), and that's a real and growing problem for the Chinese economy.

Re:Good

[jythie]

Actually, if you read the piece, they bought the name off the company before they started marketing the iPad, but now the company is coming back and claiming that Apple only purchased the name for use outside China. So either they did a real dumb, or this company is trying to use local corruption to shake money out of a foreign company that they backstabed and are trying to double dip on the deal.

Isn't the summary missing something?

[PickyH3D]

Apple supposedly purchase the trademark in 2009 from Proview, but it appears that they may have bought it from their Taiwanese counterparts, which the Chinese portion is using to its advantage. China being China, they are choosing to side with the Chinese-based business.

If China awards the company anything remotely close to $1 billion, then I hope Apple pulls out of China. Wishful thinking as it is, it would be interesting to watch. I also hope all such companies fail, but that's pretty obvious.

Re:Isn't the summary missing something?

[squidflakes]

There is a place where they could go where there is a whole huge pool of workers who have had their rights trampled, their savings destroyed, and their ability to think dismantled in a systematic way for decades. It is called The United States and there are people there who will jump at the chance to get a job, no matter how terrible the conditions, how grueling the work, or how poorly compensated they are.

Of course, we're not talking Chinese slave wages, but close.

Re:Isn't the summary missing something?

[luis_a_espinal]

There is a place where they could go where there is a whole huge pool of workers who have had their rights trampled, their savings destroyed, and their ability to think dismantled in a systematic way for decades. It is called The United States and there are people there who will jump at the chance to get a job, no matter how terrible the conditions, how grueling the work, or how poorly compensated they are.

Of course, we're not talking Chinese slave wages, but close.

At Foxconn salaries? You are on drugs if you think so.

Mind you that I would love to see these jobs back in the US, but you are engaging in wishful, triumphalist thinking. These jobs, and all of those jobs WILL NOT COME BACK. Furthermore, it is unreasonable, however much we love this country, to presume replacing $1/hour Chinese workers (if they are lucky) with no benefits such as sick leave with $15/hour (at least) US workers with all the minimal benefits one would typically according to the law.

If it is not China, there is India, or the Philippines or Indonesia or Thailand or Ghana or Brazil or Argentina or Central America or Romania... shall I go on? The time where the majority of the world lived in violent stone age conditions is gone (most likely forever.) New markets and manufacturing grounds are available all over the world.

From a purely capitalistic point of view, it makes no sense to do mind-numbing manufacturing in the US. Even if you were to improve working conditions in China, it will still be immensely cheap. Even in countries with a strong stakeholder's capitalist mentality like Japan are finding out harder and harder to keep tricket-manufacturing jobs within their own borders.

The only way for the US to get these jobs back is with heavy government involvement, greater subsidies (meaning higher taxes), all the stuff that our bovine collective calls "socialism" in a brain-dead, knee-jerking fashion.

Those jobs ain't coming back Sonny boy. We are simply not capable of competing for them anymore. We demand greater salaries and we have higher costs of living than our foreign competitors (not to mention that our competitors actually produce HS graduates that know how to read, write and add fractions, which we don't.)

In other words, unless we do something else entirely, we are in deep shit.

Re:Good

[Anonymous Coward]

I can assure you, it will be the last for him.

In FreeMarket Communist China...

[Sir_Eptishous]

all your iPad are belong to us!

Re:Good

[compro01]

Let Apple taste some of their medicine.

We're going to need to increase the dosage dramatically if we want them to start paying attention.

Re:Good

[Alan Shutko]

You need to read the history on this one before commenting. It's not a simple matter. In this case, Apple bought the mark from an intermediary who bought the global rights from Proview (Taiwan). Apple claims they bought the rights outright, Proview claims that the china rights were held by a second subsidiary, Proview (Shenzhen)

From http://www.marbridgeconsulting.com/marbridgedaily/archive/article/53231/update_apple_appeals_ipad_trademark_lawsuit#When:12:00:00Z

Apple laid forth a number of views in its appeal, including that the case should be adjudged according to the laws of the Hong Kong Special Administrative Region; that Proview (Shenzhen) had given written authorization for Proview International Holdings' Taiwan subsidiary, Proview Electronic, to sign a trademark transfer agreement, under the principle of unnamed agency, meaning that all iPad-related trademarks should be considered by the court to have already been transferred by Proview (Shenzhen) to Apple. Apple will also name Proview Electronic as a defendant in the case.

Re:Perhaps the Chinese will respect IP?

[cyfer2000]

China government is there to protect Chinese IP and US government is here to protect US IP. Nothing will change.

Re:Perhaps the Chinese will respect IP?

[MickyTheIdiot]

No... Chinese gov't protects the Chinese and the US gov't protects the top 1% of shareholders who import the Chinese crap. Don't start thinking that the government protects US IP or US people in general. They don't do that.

Re:What about MaxiPad?

[Kenja]

Not till Apple introduces the new 21 inch Max-iPad.

ROC vrs PRC

[ZombieBraintrust]

There are two companies. They paid for use of the trademark from one based out of Tiawan. The Chinese arm of the company is filing the lawsuit. Not sure witch is the parent company. I would assume the Tiawan based one since that is who Apple paid. China does not reconize Tiawan as a seperate country. So there may be some politics involved in this dispute.

Re:ROC vrs PRC

[amicusNYCL]

The Chinese arm of the company is filing the lawsuit. Not sure witch is the parent company. I would assume the Tiawan based one since that is who Apple paid.

Both companies are subsidiaries of a larger parent company.

Proview International, which owns subsidiaries Proview Technology in Shenzhen and Proview Electronics in Taiwan, originally registered the name 'iPad' in Taiwan in 2000 and mainland China in 2001.

Apple bought the trademark from Proview Electronics, and they are now being sued by Proview Technology. Both companies are owned by Proview International, which is based in Hong Kong.

Re:Good

[greg1104]

And like McIntosh Laboratory, Cisco's iPhone, and the way the Mighty Mouse turned into the Magic Mouse. It's hard to feel sorry for Apple when they keep making the same class of mistake.

Could Proview prevent exports of Chinese made iPad

[robbak]

Surely, if Proview is established as the owner of the trademark within China, then the iPads being produced in China by Foxcon are counterfeit items. Could that be the basis for an injunction banning the export of these items?

That would be an excessively heavy hammer to bash an enormous settlement out of Apple.

Re:What about MaxiPad?

[Anonymous Coward]

Possibly. Both Maxipads and iPads are used by cunts.

Re:What about MaxiPad?

[24-bit Voxel]

Life was much easier back in the day with my zip drive, voodoo 3, and Pentium 2 MMX overdrive. That thing had loads of EDO RAM. Adding the Kittyhawk was just overkill, but I'd like to think the Diamond Stealth 64 ensured that "outside" was just a concept. Poor bastard down the street had an Audrey 2000, and my brother got my old Sinclair 1000! (lol!)

Still far superior to the Adam though....

Re:What about MaxiPad?

[hairyfeet]

You joke but you have to admit during the MHz wars things were easier to track, faster was better and the PR rating would give you a pretty good idea when it came to AMD VS Intel. Hell look at the old Athlon and Phenom, Athlon was the budget chip, phenom the more high end, the number by the X told you how many cores and faster was better, simple really.

Now good luck telling shit without a lookup table! Quick tell me what an A4-3300 is? did you say a quad core? WRONG its a dual, WTF? Quick what features separate the i3 2100 from the i5 2500? Does either of those tell you jack shit without a lookup table? NO. Hell the only nice thing i can say is at least AMD isn't playing feature roulette, unlike Intel which you can't tell which ones support which features without a chart, even the bobcat at least does support all the features.

Frankly i think the whole thing is designed to fuck customers, that is the only reason I can think of. it makes it damned near impossible to do a simple side by side comparison of anything, either from different manufacturers or even of the same manufacturers products, so the ONLY thing people can do is "higher priced must be better" which of course don't really tell you shit except it costs more.