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Apple Keeps Selling iPad in China As Trademark Dispute Escalates

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Apple's fight over the trademarks for the iPad name in China is far from over, with Proview saying yesterday it's going to sue Apple in the U.S. for $2 billion — up from the $10 million it originally wanted and a far cry from the $55,000 Apple said it paid Proview for the trademarks in 2009.

While some retailers in China say they've stopped selling the iPad while the dispute lingers, Apple said today that its four retail stores in mainland China continue to offer the tablet.

Not up to speed on what's going? A Hong Kong court's ruling, from July 2011, provides some background: How Apple, before the introduction of the iPad in 2010, set out to register and acquire trademarks for the name, using so-called special-purpose companies to buy up the rights because it wanted to "maintain confidentiality and the anonymity of Apple." It called the company IP Application Development. And how its trademark hunt led it to Proview, which said it owned the iPad trademark in eight countries or territories, including two in mainland China.

Here's where the dispute comes in: Apple says it bought all trademarks for the iPad name in December 2009 from a Proview Group subsidiary for £35,000 (or about $55,000). Apple says that after talking to Proview Holdings, Proview Electronics and Proview Shenzhen, it cut the deal with Proview Electronics, which it was told owned the China trademarks. A few emails (see below) between Apple's special-purpose company and Proview seem to show that to be the case.

After the iPad was announced in January 2010, Apple was informed that the China trademarks were in fact owned by another subsidiary — Proview Shenzhen —and that this time the company wanted $10 million for the China trademarks to the iPad name.

As the legal wrangling continued, and as Proview Group filed for bankruptcy, Apple told the Hong Kong court that Proview Shenzhen was in the process of selling the trademarks to another company, Yoke Technology, even though it claimed it wouldn't seek out any sale.

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Ultimately, the Hong Kong court ruled against Proview CEO Yang Rongshan and in Apple's favor, saying:

"The conduct of all the defendants demonstrate that they have combined together with the common intention of injuring Apple...Proview Holdings, Proview Electronics and Proview Shenzhen, all clearly under Yang's control, have refused to take any steps to ensure compliance with the agreement so that the China trademarks are properly assigned" to Apple.

"We bought Proview's worldwide rights to the iPad trademark in 10 different countries several years ago. Proview refuses to honor their agreement with Apple in China and a Hong Kong court has sided with Apple in this matter," Kristin Huguet, an Apple spokeswoman said today. " Our case is still pending in mainland China."

Apple, in fact, lost its case against Proview in mainland China last year, which cited a lack of evidence. But Apple has appealed and will argue before a higher court in the next month. This time around, Apple, which counts China as one of its fastest-selling markets, gets to use documents that Proview provided to the court in Hong Kong. The Hong Kong court gave its permission yesterday.

Proview is far from done. The company held a press conference yesterday saying it's in the process of choosing from among three U.S. law firms to sue Apple in the U.S. for $2 billion. In the meantime, it handed out an ad to reporters showing its iPad — or Internet Personal Access Device. The Proview iPad, which it says it spent $30 million developing, looks more like the old iMacs than a tablet computer.

Yang, quoted by the Times of India, maintained that his company owns the iPad trademark in China. "If you were in my position... you would try to protect your rights."