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Apple settles Proview dispute

By Ji Beibei (Global Times)

08:04, July 03, 2012

Apple Inc has paid $60 million to end its iPad trademark spat with Proview Technology (Shenzhen), a deal which paves way for Apple to sell its new iPad in China, but not large enough to save Proview from possible bankruptcy.

Guangdong High People's Court announced Monday morning on its microblog that Apple and the Shenzhen unit of Hong Kong-listed Proview International Holdings Ltd, have entered a court-mediated settlement with Apple having paid $60 million to Proview.

Xie Xianghui, a lawyer representing Proview, told the Global Times Monday the result is "unsatisfactory but the best Proview can get."

As the compensation is "lower than Proview needs to cover its debt, the firm is on the verge of bankruptcy," Xie said.

Proview, once a global computer monitor maker, owes eight local banks some $400 million, according to Xie.

Some of Proview's creditors earlier requested a court to process bankruptcy liquidation of the company, but the proposal was rejected on the ground that the iPad trademark owned by Proview as a company asset might be valuable enough to pay off its debts.

Proview registered the iPad trademark in China in 2001. In 2009, Apple's subsidiary bought the trademark from Proview Technology's Taiwan affiliate at a price of some $55,000.

Though Apple believed it received global rights to the iPad trademark from the 2009 deal, Proview claimed that the deal did not include trademark usage right in the mainland.

On February 29, the Guangdong court heard Apple's appeal against a lower court which ruled in 2011 that Proview owned the iPad trademark in the mainland.

The public relations department of Apple China could not be reached for comment Monday.

"The deal removes potential barriers for Apple to sell its new iPad in China and the compensation is not too high in view of Apple's soaring sales revenue in the market," Zhang Zhifeng, an intellectual property rights lawyer with Beijing Hengdu Law Firm, told the Global Times.

Zhang said the deal must be acceptable to Apple, otherwise it wouldn't have agreed to it.

"The case is a lesson for both foreign and Chinese companies," Zhang noted. "It is important for both foreign companies operating in China or Chinese companies doing business overseas to know local rules and check details of contracts, in addition to developing good products," Zhang noted.

China is Apple's second largest market after the US. The company's China revenue accounted for one fifth of its global revenue by March, according to its financial report for the first quarter this year.

Apple's China sales surged over 300 percent to a historic high of $7.9 billion in the quarter, which equals revenue of $87.77 million per day, said the report.

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