Proview ‘Hopes’ Apple Makes Contact on IPad Settlement Talks

A lawyer representing Proview International Holdings Ltd. (334) in its dispute with Apple Inc. (AAPL) over the iPad trademark in China said he “hopes” the U.S. company makes contact to begin settlement talks.

Roger Xie said the two sides haven’t held any formal negotiations on the issue of which company owns the right to use the iPad brand in the world’s most populous nation. Lawyers presented arguments for almost six hours yesterday at the Higher People’s Court of Guangdong before being asked by the three- judge panel if they wished to settle.

“Up to now, we didn’t have any formal negotiations with Apple,” Xie said in a telephone interview today. “I hope they will positively contact us and make an appointment with us about formal negotiations out of court. It would be useful.”

Apple has appealed a November ruling by a lower court that the trademark belongs to the Shenzhen unit of failed display maker Proview. Apple claims its 2009 purchase of the rights from Proview’s Taiwan unit covers the mainland.

Judges adjourned yesterday’s hearing without giving a new court date or a timeframe for a ruling. Under Chinese law, the time limit for ruling on an appeal is three months, although that can be extended in exceptional circumstances, Xie said today.

Consumer Confusion?

Apple’s Beijing-based spokeswoman, Carolyn Wu, didn’t immediately return calls and e-mails seeking comment.

Consumers in China have come to associate the iPad trademark with Apple and allowing Proview to use the brand would cause confusion, the U.S. company’s lawyer, Shi Yusheng, told the appeal hearing yesterday.

“Who created the value of the iPad trademark?” Shi asked the judges. “I think everybody knows the answer.”

Losing the appeal would open Apple to lawsuits seeking damages and enable a ban on iPad sales in the Cupertino, California-based company’s biggest market outside the U.S.

The dispute centers on whether Proview’s Taiwan unit, which Apple paid 35,000 British pounds ($55,000) to use the iPad name in mainland China, had the right to sell it or whether that rested with the Shenzhen unit and its creditors, including Bank of China Ltd. (601988) and China Minsheng Banking Corp. (1988)

Apple sued Proview Shenzhen in 2010, claiming ownership of the trademark in China on the basis of a December 2009 contract the U.S. company says gave it global rights to the name in 10 countries.

Apple Sales

The Shenzhen Intermediate People’s Court rejected Apple’s claims on Nov. 17. The court said the purchase agreement was signed in the name of Proview’s Taipei-based subsidiary, Proview Electronics Co., which failed to demonstrate that the transfer was approved by the Shenzhen unit that owned the mark.

Proview’s Shenzhen unit obtained the iPad trademark in China in 2001 for a desktop terminal with a touch-screen display called the Internet Personal Access Device, or iPAD, that the company developed starting in 1998.

About 20,000 of the devices were sold over more than 10 years, according to Rowell Yang, chairman of the Shenzhen unit.

Sales of Apple’s iPads topped 32 million worldwide last year, earning revenue of $20.4 billion. In less than two years, the device has become the company’s second-best selling product by revenue, behind the iPhone.

To contact Bloomberg News staff for this story: Edmond Lococo in Beijing at elococo@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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