The iPad is doing incredibly well in China; over a million were sold between April and June, which gives them around 75% of the tablet market. Apple’s four official stores are among the most successful in the world, which led Tim Cook to remark “China – the sky’s the limit there!” That didn’t stop a Chinese court from ruling against Apple’s claim to the iPad name.
Proview Electronics registered the iPad name in 2000 when it was considering selling its own tablet computers. In 2006, when Apple was developing the iPad, they wanted to copyright the name in China and contacted Proview Electronics in Taiwan. They claimed to have the naming rights in eight regions, including China, and sold them to an agent secretly working for Apple for $55,000. However, they didn’t have the naming rights at all because they were registered with Proview Electronics in Shenzhen.
Apple asked them to have the iPad name, and when Proview realized who they were dealing with, they promptly asked for ten million dollars. Apple refused and sued them claiming they had already purchased the iPad name in China. Unfortunately, the judge disagreed, saying Apple should have paid closer attention to what it was buying and from whom. Worse yet, Proview Electronics in Shenzhen is suing Apple for 1.6 billion dollars for compensation and is trying to block the iPad from being sold in Shenzhen and Huizhou. If they’re successful, they’ll try to get the iPad banned in all of China.
Now Apple may have to sell the iPad in China under a new name, pay some money for the rights to the iPad name, or stop selling the iPad in China entirely.
This shows the weakness of relying on the courtroom to get your way. Apple may have believed they were in the right and owned the iPad name in China, but the judge was right in that Apple should have been more attentive to the intricacies of Chinese law. Whatever happens, it’s likely Apple will have to pay a lot more than ten million in order to use the iPad name.