Apple's just thrown $60 million at Proview for the rights in China to the iPad name. Something which should serve as a reminder to all of us in business that we really should RTFC. That's read the flamin' contract.
The basic background is quite simple. Proview had a product called the iPad, essentially a clone of a Compaq product. It didn't sell well, they'd stopped making it when Apple was casting around for a name for its new tablet computer but they did still own the trademark. Apple rather liked the idea of calling the iPad the, umm, iPad, fitted in nicely with the iPod and iPhone nomenclature. So a deal was reached, through a shell company, for Apple to purchase that trademark for a trivial sum.
The iPad is launched, one of the most successful consumer or technology products ever and then Proview discovers something to its advantage. While they had sold the worldwide rights to the iPad name for some reason (somewould say complex legal ones, others lawyerly incompetence, still others allege conspiracy) the rights to the brand in Mainland China still remained with Proview's Mainland China subsidiary.
At which point a lovely legal fight erupts. Apple cannot sell the iPad in China itself. There are repeated stories about their being smuggled in from nearby locations, even of buyers on the West Coast of the US shipping them in. Apple starts out insisting it's all a minor mistake, something easily solved, Proview and the Chinese courts take a more hard headed view. Which leads to today's news:
Apple has forked out $60m to settle the row over the name IPAD with Chinese firm Proview Technology.
The fruity firm agreed to the sum to buy the name from Proview in mediation talks, the Higher People's Court of Guangdong said in a statement (translated by Google Translate).
"All parties involved have agreed on the settlement. Proview and Apple now no longer have a dispute over the iPad trademark," Xie Xianghui, a lawyer for Proview, told state news agency Xinhua.
It's settled, which means that Apple can now legitimately sell into China, which is good. But of course the settlement is far higher than if they'd actually read the contract properly in the first place.
Which leads to the important point for the rest of us in business: RTFC. Read the flaming contract before you sign it. Make absolutely certain that it says what you want it to say, that there are no grey areas, and that there are no loopholes by which you can get burnt.
This is especially important in places with, how to put this gently, a flexible interpretation of the rule of law. I've seen people in Russia sign contracts that you could drive a coach and horses through. Sure enough, local partners do just that. That who knows who, who knows the judge, is important in such places does not mean that you accept a shoddy contract. Quite the contrary: for that flexible attitude to the law requires an opening. There needs to be a loophole through which the shenannigans can operate and a well written contract won't leave them with that room.
Over the years my own contracts have become simpler and simpler: one page usually does it. What am I buying at what price for delivery where and when? That doesn't leave much wheedling room for anyone to argue about it later.
But even if you don't want to go to such extremes the essential point still stands: as Apple has just shown us it is terribly important to actually read and understand the contract you are signing.
