Computer giant Apple is currently set to face off in China’s high court at the end of February with Proview Technology (Shenzhen) Co Ltd, a Chinese based technology company. The court battle stems from a claim by Proview that it holds the trademark rights to the use of the name iPad in several countries worldwide, including China. If you are reading this on your iPad or participating in Chicago events, or anywhere else in America, you may be wondering why Apple’s legal troubles in China should be of any concern to you? The answer to that question lies in the potentially far reaching ramifications of a loss for Apple in the current legal battle set to take place in China.
Apple’s legal troubles are based on the contention by Proview that Apple failed to legally acquire rights to the iPad trademark, including the rights to use the name, in China. Proview was once the owner of the trademark; however, Apple asserts that it purchased the worldwide rights to the trademark from a Taiwan subsidiary of Proview. Proview claims that although Apple did purchase some rights to the iPad trademark, the purchase by Apple did not include the rights to the use of the name in China.
Apple lost the initial round of legal maneuvering in a Shenzhen court in southern China late last year and is now set to defend the case on appeal to the southern Guangdong High Court on Feb 29th. Under Chinese law, if Apple loses in Guangdong, the decision will be final.
A ruling against Apple in Guangdong will not only prohibit the company from selling its tablet under its current name in China, but may also prohibit Apple from exporting any future tablets made in China. This is where the average American living in Chicago feels the impact of the litigation. For the average American consumer, Apple losing the revenue from the large Chinese market is not of concern; however, China is also a large manufacturing base for Apple products, including the iPad. This is of concern to the average American consumer given the popularity of the item in America. A ruling against Apple in the upcoming appeal may result in the Chinese government banning the export of iPads or any related products that bear the iconic name.
Media reports out of China are already reporting that Chinese authorities have ordered retailers who have historically sold the famed Apple tablet to cease all sales based on the ruling in Shenzhen. The current belief is that the Chinese government will not only order all retailers to cease selling the tablets throughout China, but that it will also order Chinese customs to seize any exports of the product if Apple loses in Guangdong, resulting in Apple’s inability to get their finished product out of the country. For American consumers, this could result in a noticeable shortage of the popular product until Apple resolves the problem.