According to a local Chinese court, Apple has agreed to pay US$60 million for ownership of the iPad trademark in the country, as part of a settlement with Proview, a small PC and display vendor that had tried to ban sales of the popular tablet in China.
The Guangdong Province Higher People's Court announced the settlement on Monday, July 2, stating that the legal dispute has finally been resolved. Chinese authorities transferred the "IPAD" trademark to Apple once the iPhone maker made the payment to Proview.
The two companies have been engaged in a legal dispute to determine rightful ownership of the iPad trademark. Apple claimed to have bought the iPad trademarks for China from Proview back in 2009. Meanwhile, Proview - the little-known PC and display vendor now on the edge of bankruptcy - argued that it never officially sold the iPad trademarks to Apple. Proview filed complaints and lawsuits against the Cupertino, California iPhone maker, and demanded that local authorities ban sales of the iPad in China because of trademark infringement.
The Chinese court was expected to rule on the case, but ahead of the ruling the court encouraged the two companies to negotiate a settlement. In recent months, Apple and Proview have been in talks to settle the legal dispute, as the court suggested.
Apple's latest iteration of its popular tablet, the third-generation iPad, has yet to be sold in China, although it cleared all regulatory checks. According to analysts, this legal dispute with Proview over the iPad trademark may be the reason behind the sales delay in the country.
Proview is facing possible bankruptcy, and is buried in debts - eight banks have taken over Proview's assets and the company owes them $180 million. In an effort to clear its debts, Proview had sought as much as $400 in settlement from Apple. According to Li Su, the head of the consultancy representing the eight banks, Apple wanted to pay only a few millions of dollars at first for the iPad trademark. Over time, however, the tech giant realized the legal dispute would linger in Chinese courts until a settlement was reached, and negotiated reasonably.
"Some may feel that Apple had help from Chinese leaders by spending a lot of effort on public relations," said Su, referring to Apple CEO Tim Cook's visit to China in March, when he met with government officials. "But I think Apple was acting in good faith," he added, as cited by IDG News' Michael Kan. "Apple only needed to pay a small amount to resolve what could have been a major inconvenience."
