Apple, inc. has agreed to settle a Chinese lawsuit over the iPad trademark at a cost of $60 million.
The world’s largest technology firm had claimed in court documents that it was legally using the iPad name. Apple claims that it reached an agreement in 2009 and bought the rights to the iPad trademark from Proview.
Foreign company’s have long run into intellectual property challenges in China and this recent settlement is seen as a way to avoid even bigger legal complications in the country. For example Proview had asked the court to restrict all sales of Apple iPad based devices in the country. China is Apple’s second largest consumer of iPad based devices.
Apple lost an original court case against Proview Technology and then appealed that decision. During the court case Proview argued that it still owned the name rights in China and asked that customs offices stop the import of all the devices until the court case was ended.
In the meantime Apple is still engaged in various lawsuits with electronics firms throughout China, some cases high-profile enough to be led by Apple CEO Tim Cook.
The ProView Technologies case was settled out of court to avoid further complications, it is unclear what Apple received out of the agreement.
A ProView representative had originally asked for upwards of $400 million but quickly accepted the $60 million settlement because ProView was being pressured by clients to pay various forms of debt. Acquiring the iPad name in 2001 the company originally sold naming rights to Apple for just $55,000. Apple at the time had purchased the naming rights through a ProView affiliate which a judge said made the company not bound to the sale.
The settlement may not be good for the China tech sector as a whole where American and other tech companies from around the world may find the settlement to be a troubling trend in which affiliate company’s sell the rights to trademarks and other items and their parent company’s than claim true control when products become successful, essentially holding the company’s hostage. A Hong Kong court recently ruled that ProView and the Taiwanese company that sold the iPad naming rights to apple were “clearly under the control” of the same Taiwanese businessman Yang-Long-san. According to a judge in the Hong Kong case, both companies worked together with the “common intention of injuring Apple.”