Made in China. But not readily available on store shelves. That could be the case — for iPads soon.
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With global anticipation already building for the iPad 3, Apple has to overcome a major roadblock first: A small Chinese company — challenging Apple on intellectual property grounds.
“The Shenzhen Proview company won a court ruling saying it owns the iPad name in China and wants China’s customers to seize all the units for import or export.”
Taiwan-owned Proview International that manufactures flat-screen displays, registered trademarks for the name “IPAD” in Mexico, Europe, China and other Asia countries in 2000.
In 2006, the company sold those trademarks to a company linked to Apple, which reportedly had Apple thinking it had the rights inside China. But according to CCTV, that trademark still belongs to the company’s Shenzhen subsidiary, Proview Technology.(Video:CCTV)
iPads have already been removed from the shelves in at least two Chinese cities, and Apple is facing more lawsuits. That isn’t the half of it.
The trademark dispute could also block Apple’s exports from China. According to Chinese law, after a trademark is recorded, customs will seize shipments from any sender other than the rights holder. An Intellectual Property expert tells the Financial Times.
“Multinationals frequently use this against counterfeiters, but it is also being used by Chinese companies against foreign firms … many foreign companies failed to register trademarks in China because they were not aware that this mattered for exports as well.”
Apple Insider says, that little-known law could spell big trouble for Apple.
“…it could result in a global stoppage of sales, as all iPad units are currently built in China. Apple’s manufacturing partner Foxconn is looking to assemble iPads in Brazil, but as of late January production had not yet begun there.”
The New York Times doubts the Chinese government would go that far.
“…because of the potential for diplomatic repercussions and an exodus of foreign corporations unwilling to put their operations at risk.”
So serious trouble, or a curious diversion. A Forbes blogger finds humor in this Apple bite.
“Myself, I have to admit to a snigger or two. Given Apple’s aggressiveness in defending their own IP around the world there can’t be too many complaints about someone playing back the ball back good and hard to them, can there?”
So where does the case stand now?
A Chinese court has upheld a ruling saying Proview owns the iPad trademark. The company is asking for up to $1.6 billion in compensation. Apple is appealing. A final hearing is scheduled for February 29th.