Restoring the iPad trademark case: Who has deceived Apple and Proview?

“The whole matter up till now, Proview has been aggrieved.” On the morning of February 17, Yang Rongshan, the president of Proview Group, first described his personal feelings in the media when he talked about media disputes over the trademark of the iPad in Beijing.

"Apple did manage to perfect the iPad product, so it is loved by users all over the world. However, this success does not justify the fact that it has entered the Chinese market in large quantities when it has not achieved the iPad trademark." In Yang Rongshan's view, now only What Crown does is only to safeguard its own rights and "hope to receive fair treatment."

However, Apple apparently does not agree with this statement.

Three days ago, Apple had just issued a brief statement: “Years ago, we purchased Proview’s iPad trademark rights in ten different countries around the world. Proview refused to recognize and implement agreements involving the Chinese part. The Hong Kong court has supported it. Apple's litigation in mainland China is still going on."

Although the statement was short, it revealed Apple’s firm attitude. That is: Apple has already purchased the iPad trademark in mainland China. Proview does not honor its promise and Apple will litigate in the end.

The sudden confrontation between the two sides caused the iPad brand right that had been quiet for more than a year to be controversial again. Proponents believe that this is a purely commercial dispute. The opponents pointed out that this is more like a kind of "rogue" behavior, and it does not comply with the promise of the law.

In fact, the original Proview and Apple had the opportunity to sit down and negotiate on the trademark rights of the iPad on the Chinese mainland. It is very likely that the matter will be settled by Apple's payment of additional transfer fees. However, since Shenzhen Weiguan was seized by eight major creditor banks due to huge losses in 2010, things began to move in an increasingly complex direction because of the different abacus of different stakeholders.

Proview seems a bit involuntarily. “We have never formally publicly stated what kind of (retribution) figures we are asking for. Like the billions reported on the Internet, we have not mentioned such a request.” Yang Rongshan said that we must first look at our creditors, after resolving the debt issue. Only the interests of shareholders can be found.

Representative of the lawyers group, Guo Dongxiao, a partner lawyer of Guohao Law Firm, said, “All of our lawsuits are not directed against Apple Inc. of the United States and are directed against their distributors in China. We have not filed a trademark infringement against Apple. The amount of money.” Ma Dongxiao said that the penalties currently imposed by the industrial and commercial departments around the country are also determined by the industry and commerce, and have nothing to do with Proview.

On behalf of the bank’s advisor and Su Jun’s chairman, Li Su, made it clear that Apple should pay compensation, and they are seeking to go to the United States to sued Apple’s alleged transactions “fraud”. Li Su told the media that a number of US law firms have contacted him and hope to get involved.

As of right now, how the iPad trademark case eventually ends will not seem to be determined by Proview and Apple alone.

iPad's past and present life

The Apple iPad, known as the tablet computer market in the true sense, is experiencing an unprecedented storm in China.

This product, which is hot in the world and is also very popular in China, was criticized by the famous display manufacturer, Proview, for not having obtained trademark rights in mainland China. Apple, on the other hand, firmly denied that it had already purchased the global iPad trademark from Proview.

Who is lying, and what has the two sides experienced in the past? To understand this issue, we have to start with the beginning of the "iPad".

According to Yang Rongshan's memories, Proview started designing a product called the iPad in the second half of 1998. The full name is Internet Personal Access Device. At the time Proview invested more than $30 million in R&D. In addition to the iPad, Proview also has iWEB, iNOTE and other iFAMILY products.

Proview made a iPad launch in Hong Kong in 2000. According to the information provided by the photos, Proview iPad is a device using a traditional CRT monitor. Yang Rongshan's explanation is: "At that time, the flat panel display was not so popular, and the price was very expensive. So the first generation of the iPad was made of CRT, but it also had a touch screen."

Since the timing of the launch was too early and the touch screen using the CRT display was very prone to misoperation, Proview's iPad did not cause much repercussions in the market. According to Yang Rongshan, but the products have actually been sold all over the world, and Proview has registered the iPad trademark globally, and then began to develop the next generation of iPad products in 2003.

After that, Proview and Apple had the first ever confrontation.

At that time, Apple was still selling the iPod, a music player product. When Apple went to Britain to register an iPod trademark, because it was similar to the iPad trademark owned by Proview, Proview spent a lot of money to file a lawsuit to prevent Apple from applying. According to Yang Rongshan, in the end, Proview gave up, but he did not explain why he gave up.

At that time, the development momentum of Proview was excellent. It was among the top five monitor manufacturers in the world. However, after the 2008 financial crisis, everything changed.

"When the financial turmoil occurred in 2008, Proview suffered a great deal of damage," Yang Rongshan said. It is mainly due to the collapse of the two largest customers in the United States. At that time, the average price of LCD screens quickly dropped from US$250 to US$140, which dropped by 60%, and eventually led to the RMB2 billion owed by Proview Bank.

According to Yang Rongshan, due to the financial crisis, Proview made a decision to fully shrink in overseas markets, and Proview Electronics Co., Ltd. (ie Proview Taiwan) is also shrinking. It is in this context that Proview Taiwan and Apple's agent company signed an iPad trademark transfer agreement that has now attracted a lot of controversy.

iPad trademark benefits transfer

In the dispute over the iPad trademark, many people now believe that Proview's approach is quite "rogue" - it is clear that Proview Taiwan has signed a global transfer agreement, but Proview Shenzhen also denied that the agreement contains the Chinese mainland's trademark rights.

However, Proview also has its reasons for anger. If you trace the "original sin" of the matter, Yang Rongshan even believes that Apple originally purchased the iPad trademark rights in other regions from Proview Taiwan.

According to Yang Rongshan, in August 2009, after Apple’s “meticulous design”, a company called IP Application Development Limited (IPADL) was established in the United Kingdom. Because its abbreviation is the same as the iPad, the other party found Proview UK staff contact and asked for a trademark.

Yang Rongshan said that he had communicated with colleagues afterwards and learned that the other party had promised that the product would not compete with Proview. And from the requirement of European trademarks, it is necessary to further purchase Proview iPad trademarks in other parts of the world, asking price is 20,000 pounds.

Restoring the iPad trademark: Who has deceived?

This price has not been approved by Yang Rongshan. However, the other party subsequently sent an e-mail that if Proview did not accept the offer, it would initiate a lawsuit requesting the cancellation of Proview's trademark. Yang thinks that this was a “threat” to Proview at the time, because Proview in the financial crisis could not afford to fight for any lawsuits, and Proview’s assets were already within the scope of global contraction. “We can sell some money. It's better to spend money than lawsuits."

Therefore, on December 23, 2009, Prof. Mai Shihong of Proview Taiwan’s Legal Department was authorized by Yang Rongshan to sign a £35,000 iPAD trademark transfer agreement with IPADL. In the annex of this agreement, 10 trademarks of iPAD are listed in each region. Trademark rights in China are also included.

One month later, on January 27, 2010, Apple officially released its tablet PC iPad to the world. At this time, Yang Rongshan suddenly realized that the IPADL company was behind Apple.

Yang Rongshan carefully investigated the contract. He found that Proview has a total of 10 IPAD trademarks, of which Proview Taiwan has 8 trademarks in other countries and regions in the world, while the two categories of trademark rights in mainland China are in the hands of Shenzhen Proview. In other words, Proview Taiwan does not represent Proview Shenzhen to sell assets. However, Apple believes that the legal representative of Proview Taiwan and Proview Shenzhen is Yang Rongshan, and that Proview Taiwan can represent Proview Shenzhen.

After that, Proview and Apple launched a full-blown iPad trademark in China.

According to the reporter's understanding, in fact, when Proview Shenzhen filed a trademark right with Apple in its hands, at first Apple was still willing to sit down and negotiate. However, with the approaching date of the iPad market in China, Proview's quotation is rising all the way from 10 million dollars to 20 million, and then rose to 40 million. This makes Apple very dissatisfied.

However, the only real reason for Apple to give up its negotiations with Proview was that eight banks including the Bank of China and Minsheng Bank sealed up their assets. According to Li Su, Proview initially wanted to transfer the iPad trademark rights to a debt-ridden company outside of Shenzhen, so that it would be easy for them to negotiate the sale of the iPad trademark.

However, a paper ban in Hong Kong Court in 2010 made Proview's wishful calculations fail. Li Su said that since Proview and Apple were still in negotiations, the court ruled that Proview was not allowed to transfer the trademark during this period. In the end, Proview’s entire assets including the iPad trademark were seized by eight creditor banks.

Li Su said that after learning of this news, Apple immediately communicated with banks individually and asked if it would sell the iPad trademark. After receiving a positive reply, Apple believed that there was no problem with the trademark, and then officially began selling iPads in China.

Li Su believes that the fact that Apple did not obtain authorization to openly sell the iPad actually angered eight banks. "Now all 8 banks believe that the iPad trademark is Proview's most valuable asset. It opposes bankruptcy and decides to continue to pay off." The core of the repayment is how much transfer fees Apple can pay.

Court confrontation

The bank's involvement has made it even harder for Apple to get iPad's Chinese trademark rights without paying the price. Because as a creditor, it is natural that the seized asset can sell at a higher price to make up for its losses.

However, for whatever reason, Apple seems to be reluctant to eat this “dead” or to rely on a paper agreement from Proview Taiwan to confirm its rights to the iPad China trademark.

In fact, in the recent dispute between Proview and Apple, it was also the Apple side that initiated the formal lawsuit.

In April 2010, while Apple launched the iPad in the United States, it filed a lawsuit in the Shenzhen Intermediate People’s Court to confirm that Apple’s trademark rights in China were owned by Apple. In May 2010, Apple filed a lawsuit in the High Court of Hong Kong, mainly involving the trading contract between Taiwan Proview and IPADL.

According to Ma Dongxiao, an attorney for Proview, the core issue of the Shenzhen lawsuit is: Apple’s IP company purchases, in the end does not include the trademarks of the Chinese mainland, and whether Taiwan Proview can sell the Shenzhen Proview trademark.

According to its introduction, of the ten trademarks owned by Proview on the iPad, eight are under the name of Proview Taiwan and two are owned by Proview Shenzhen. The core point raised by Apple in the court debate is that the legal representative and actual controller of Proview Taiwan and Proview Shenzhen are both Yang Rongshan, so the agreement signed by the Taiwan company is also valid.

Ma Dongxiao believes that the authorized signing person of the transfer agreement is not Yang Rongshan, but the director of the legal department of the Taiwan company. In addition, even Yang is not free to dispose of the assets of Proview Shenzhen, especially such an important asset. In fact, the judgment of first instance in Shenzhen Court in late 2011 also announced Apple’s loss. Then Apple filed an appeal to the High Court.

After the judgment of first instance, Proview also publicly initiated a counterattack against Apple. However, it is mainly aimed at Apple's distributors in China. "Including suing Shunpower in Shenzhen, suing Gome in Huizhou, and suing Apple's economic and trade companies in Shanghai."

From this point of view, the purpose of the Proview Lawyer Group is very clear, that is, it is illegal to sell the iPad in China. Because according to Chinese law, the iPad trademark is still in the hands of Proview Shenzhen and has not completed the transfer.

“Returning one million steps, even if the court determines that the Proview Taiwan contract is legal, it must also be approved by the Trademark Office after the completion of publicity, Apple has the right to use the trademark.” Ma Dongxiao pointed out that simply saying that the "transfer" can be used after completion. This process includes that the assignor and the assignee go to the Trademark Office to handle the transfer. The application must be approved by the Trademark Office and then announced.

This was considered by lawyers to be a fatal mistake made by Apple. Ma Dongxiao believes that according to this logic, there is no problem at all in the industry and commerce bureaus to seize the iPad. "The Industrial and Commercial Bureau is not a rebuttal but an omission."

According to the reporter's understanding, in March 2011, Proview had contacted the Beijing Xicheng District Administration for Industry and Commerce, where Apple Joy City Retail Store was located, and requested to punish Apple. Ma Dongxiao said Beijing Xicheng District Industrial and Commercial Administration also issued a specific amount of 248,393,690 yuan in the ticket. Held a hearing in June 2011, but the suspension was suspended after the hearing.

Now, on the one hand, Proview is waiting for the outcome of the second instance, and on the other, it has continuously issued sequestration requests to local businesses. Li Su even suggested that the United States should go to prosecute Apple for overturning the transfer agreement signed between Proview Taiwan and IPADL on the ground of alleged fraud.

For the outside world's accusation against Proview morality, Ma Dongxiao believes that "this is a business war, and morality has nothing to do." And Yang Rongshan explained for himself, he does not like the outside world think that because of the company in trouble and hope to have more money.

"I didn't come to Beijing specifically for the press conference, but to see investors." Yang said, "We already have a complete plan and hope that Proview will have another chance to stand up."