INTELLECTUAL PROPERY AND COMPETITION LAW
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1st ASSIGNMENT
“Apple faces legal action over iPad name”
A) Case description.
A bankrupt Taiwanese company says it's going to sue Apple over its use of the trademark
"iPad" in China. The company, Proview, owns the rights to the iPad trademark in China.
Proview is a contract manufacturer of flat screens. About a decade ago, it launched a tablet
computer called the I-Pad, but it flopped.
Between 2000 and 2004, Proview registered the trademark in the European Union, China,
Mexico, South Korea, Singapore, Indonesia, Thailand and Vietnam. Then, in 2006, it sold the
trademark to a U.S. company called IP Application Development (IPAD). Proview had no
idea that company was affiliated with Apple.
Yang Rongshan, Proview's chairman, told the Chinese markets weren't included in the
agreement. Online trademark databases confirm the Chinese trademark for iPad is still under
Proview's ownership.
"It is arrogant of Apple to just ignore our rights and go ahead selling the iPad in this market,
and we will oppose that," he said. "Besides that, we are in big financial trouble and the
trademarks are a valuable asset that could help us sort out part of that trouble."
Apple, meanwhile, is already suing Proview in an attempt to make the company give up the
name. That lawsuit has blocked Proview from selling the name to a third company.
B) Case analysis
When we want to analyze this case we have to consider the following points.
First, there is a rule in the Trademark Law that comes up when someone wants to challenge
a registered trademark: non-use. No one should be allowed to monopolize a trademark
unless they actually use it.
I noticed that Chinese trademark law covers in Article 44(4) the issue about trademark
duration. It provides that a registered trademark may be cancelled if use of the mark has
“ceased for three consecutive years.” In the case of Proview and the “IPAD” mark, they didn’t
use the mark, opening themselves up to a non-use cancellation action.
Secondly, the court will consider the rationality of the damages. By means of litigation, the 8
Banks may obtain higher prices, but the apple iPad is a global brand in the use and not only
in China. iPad borrow the popularity, because Apple is worthwhile known and it can be
damaged its sales, by this negative publicity . So the court will consider the rationality of the
amount of compensation.
According to the previously international public announcement, Proview has a net liability of
7 billion Yuan, 38 billion Yuan in loans, and fails to repay the debt eight big Banks about 1.8
billion dollars. Because only assets have been bank seizure, therefore, eight big banks also
become iPad trademark actual beneficiary. According to Yang, iPad trademark is the most
valuable asset group. So there mat be also additional interest for Big Banks in this citation
against Apple.
Therefore, a reconciliation action with Apple may obtain higher interest, but the risk is bigger.
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MATTEO PEGORETTI
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