Apple Threatens to Sue Proview for Defamation as Chinese Court Asks Distributors to Pull iPads

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Associated Press reports that a Chinese court has ruled against Apple in its ongoing trademark dispute with Proview Technology over the rights to the "iPad" trademark in that country, deciding that distributors should halt sales of the iPad in China. The impact of the ruling is, however, unclear as the lawsuit is just one of many Proview has filed against Apple in its efforts to extract as much as $2 billion for the trademark rights.
Xie Xianghui, a lawyer for Shenzhen Proview Technology, said the Intermediate People's Court in Huizhou, a city in southern China's Guangdong province, had ruled on Friday that distributors should stop selling iPads in China.

The ruling, which was also reported widely in China's state media, may not have a far-reaching effect. In its battle with Apple, Proview is utilizing lawsuits in several places and also requesting commercial authorities in 40 cities to block iPad sales.

Apple Inc. said in a statement Monday that its case is still pending in mainland China. The company has appealed to Guangdong's High Court against an earlier ruling in Proview's favor.

Meanwhile, IDG News reports that Apple sent a letter to Proview today threatening a lawsuit over defamation charges. Apple had previously won a case over the trademark rights in a Hong Kong court, and Apple's threats claim that Proview has issued false public statements regarding the dispute.
On Monday, Apple sent a letter to Chinese display vendor Proview, demanding its founder Yang Rongshan cease releasing what it said was false information to the media. Apple then warned it would sue for damages caused by "defamatory statements."

"It is inappropriate to release information contrary to the facts to the media, especially when such disclosures have the effect of wrongfully causing damage to Apple's reputation," said the letter, which was provided by a person familiar with the matter.
Apple claims that a shell company it set up for the purpose of anonymously acquiring intellectual property rights purchased the iPad trademark rights in China and a number of other countries from Proview in 2009 for $55,000. But Proview later reported that the subsidiary making the deal did not hold the Chinese rights and demanded that Apple pay $10 million before a different subsidiary would transfer the rights.

The Hong Kong court ruled last year that the various Proview subsidiaries colluded in an effort to extort millions of dollar out of Apple, a figure that has now risen to $1-2 billion as Proview has continued to press its case. Chinese courts have so far sided with Proview, however, with Apple continuing to appeal there using the Hong Kong ruling to demonstrate the strength of its case.

Update: Financial Times clarifies that the court ruling today specifically related to a single retailer, Sundan. While the impact of the decision is limited due to its effect on a single retailer in a single city and the fact that it can still be appealed by Sundan, it may provide Proview with leverage as it pursues other lawsuits against resellers to try to halt the flow of iPads and force a settlement from Apple.

Article Link: Apple Threatens to Sue Proview for Defamation as Chinese Court Asks Distributors to Pull iPads
 

Apple...

macrumors 68020
May 6, 2010
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Its okay everbody! Proview jus tryin pay off their billion dollar debt. Figa they use Apple cuz they's got the ca$h.

The firm is said to be debt-laden, so many see the aggressive play against Apple as a last-ditch effort to save the troubled company from bankruptcy. According to Reuters correspondents who visited Proview’s manufacturing facility in Shenzhen, China, “The building has largely been abandoned, with its windows shattered and debris strewn liberally.”
In other words, Proview is suing to save their sorry butts from ceasing to exist. :rolleyes:
 
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charlituna

macrumors G3
Jun 11, 2008
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So how about suing the parent company that sold the rights for breach of contract in not transferring them over properly. After all, Apple has signed papers saying 'Global Rights' not 'Global but not China'.

and in the meantime, agree to the import ban and focus on keeping the finished product exports flowing. Sue the Chinese government if they fail to stop resellers from smuggling in units. Oh and get Foxconn to fast track shifting the iPad and the iPhone over to Brazil.
 

whooleytoo

macrumors 604
Aug 2, 2002
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Cork, Ireland.
So how about suing the parent company that sold the rights for breach of contract in not transferring them over properly. After all, Apple has signed papers saying 'Global Rights' not 'Global but not China'.
Indeed. Could we end up in a bizarre scenario where Apple owes the Proview subsidiary a big bagful of cash for trademark infringement, but the Proview parent company owes Apple a bag of cash for selling rights it didn't own?

Edit - clarification to the above: it's Proview Shenzen to whom Apple would owe money, and Proview Taiwan who could be deemed to not have acted in good faith.
 
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ultravioletfly

macrumors regular
Oct 18, 2007
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I bet a million dollars that Tim Cook has been looking into manufacturing costs in India, Mexico, and Indonesia, in addition to Brazil in the past few months. It would take tens of billions for such a shift, but in the long term, it might be worth it to avoid messing with China.
 

nanotlj

macrumors regular
Jan 15, 2008
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It is so strange apple lawyers act so slowly and do not know what to do. Is that a really hard case?
 

BenRoethig

macrumors 68030
Jul 17, 2002
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If I were Apple and other tech companies, I would start thinking about plants and fabs in countries that still have cheap labor, but have more consistant court systems.
 

Tiger8

macrumors 68020
May 23, 2011
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I bet a million dollars that Tim Cook has been looking into manufacturing costs in India, Mexico, and Indonesia, in addition to Brazil in the past few months. It would take tens of billions for such a shift, but in the long term, it might be worth it to avoid messing with China.
It would take years, besides, don't underestimate the Chinese market, Apple is better off taking care of this once and for all to protect production AND consumption in China....
 

FakeWozniak

macrumors 6502
Nov 8, 2007
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Funny, but if the buyer is Acme, the cost is $55K, if it's Apple its $100M. How can you blame Apple for the shell company method?
 

TallManNY

macrumors 601
Nov 5, 2007
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Indeed. Could we end up in a bizarre scenario where Apple owes the Proview subsidiary a big bagful of cash for trademark infringement, but the Proview parent company owes Apple a bag of cash for selling rights it didn't own?
Probably not. Apple would have a clear claim against the Proview subsidiary for not actually having the rights that they claim to have been selling. But the lawsuit is against the Proview parent in China. The Proview Parent is basically saying that they didn't know what the subsidiary was doing and that they can't be held responsible for that entity.

Apple should have figured out and gotten more evidence that the Proview that they were doing business with was in fact that entity that owned the right. Also, Apple tried to get out of this cheap with an anonymous shell company. Clever, but it has backfired on them. Perhaps they should have taken that first $10 million offer from Proview Parent.

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If I were Apple and other tech companies, I would start thinking about plants and fabs in countries that still have cheap labor, but have more consistant court systems.
Good point, but it is tough to make a change like that because of the possibility of a bad lawsuit. That risk seems so nebulous, until it is too late.
 

JHankwitz

macrumors 68000
Oct 31, 2005
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If I were Apple and other tech companies, I would start thinking about plants and fabs in countries that still have cheap labor, but have more consistant court systems.
Unfortunately, it's not just cheep labor. China has tens of thousands of engineers that Apple needs and uses to ensure manufacturing capability and capacity. The USA and other countries don't have this capability.

(Walk the MIT campus some day and note the percentage of American students. It's mostly oriental and Indian students. Our college prep is third rate compared to china and India, and it's getting worse)
 

gkpm

macrumors 6502
Jul 15, 2010
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Also, Apple tried to get out of this cheap with an anonymous shell company. Clever, but it has backfired on them.
The shell company is used so trademark observers don't know Apple bought the trademark, i.e. guess Apple is coming out with a product called the iPad.

If not a simple database search would have revealed it all.

It's not just Apple who does this, pretty much standard procedure.
 

xii

macrumors newbie
Aug 10, 2010
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If anything in this case leads to Apple's loss in what ever amount, China's involved administrative bodies are crooked.
 

gkpm

macrumors 6502
Jul 15, 2010
481
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If anything in this case leads to Apple's loss in what ever amount, China's involved administrative bodies are crooked.
Would this be a surprise to anyone? :)

Unfortunately I feel Apple will lose quite a bit on this, probably not billions but something in the high millions, sure.
 

*LTD*

macrumors G4
Feb 5, 2009
10,703
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Canada
It is so strange apple lawyers act so slowly and do not know what to do. Is that a really hard case?
Quite the opposite. Given Apple's results, their legal endurance, and their measured yet aggressive offensives, they appear to have the most competent legal team in tech today. Of course, it also helps to have billions floating around.
 

Blorzoga

macrumors 68030
May 21, 2010
2,555
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Unfortunately, it's not just cheep labor. China has tens of thousands of engineers that Apple needs and uses to ensure manufacturing capability and capacity. The USA and other countries don't have this capability.

(Walk the MIT campus some day and note the percentage of American students. It's mostly oriental and Indian students. Our college prep is third rate compared to china and India, and it's getting worse)
Oriental? Really?