Apple Loses iPad Infringement Suit In Guangdong: Is It Time To Panic Yet?

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Take a deep breath. Hold it. Release slowly. Repeat three times. If you get dizzy, you’re doing it too fast.

Feel better? OK, lots of news flying around out there, most of it difficult to confirm. Take the following as a snapshot of where things are today based on a variety of sources, some more reliable than others.

First, let’s talk about this lawsuit in Huizhou, Guangdong Province, and why it’s not really all that important in the grand scheme of things.

To keep things clear, here’s where the case is at the present time:

1. Proview (Taiwan) agreed to sell a portfolio of “IPAD” trademarks to Apple (via an intermediary) a few years ago. This deal included two China trademarks.

2. After the deal, Proview did not complete the transfer documents for the China trademarks.

3. The specific trademark owner is Proview (Shenzhen).

3. Apple sued Proview (Shenzhen) in Shenzhen. It lost this commercial dispute action in Intermediate Court, and the judgment was appealed to the Guangdong High Court. The case will begin on February 29.

4. Proview has filed numerous trademark infringement actions across the country and has made threats regarding Customs actions and even a U.S.-based lawsuit.

5. The administrative authorities in charge of trademark infringement (AICs) in several cities have received applications from Proview. Some have acted, which has resulted in some iPads being taken off the shelves of retailers/resellers or confiscated, while the majority, including the AICs in the large coastal cities of Shanghai and Beijing, are still “investigating” the matter.

6. A court in Huizhou, Guangdong issued a judgment last Friday finding infringement of the iPad mark and ordering a local retailer/reseller to halt sales and pay restitution.

7. Another infringement case, this one between Proview (Shenzhen) and Apple itself, is scheduled to commence in Pudong tomorrow, February 22. (I’m trying to confirm which court. I assume that since the defendant is a foreign-invested enterprise owned by Apple, the case will be heard by the Intermediate Court.)

So what about that Huizhou case? My conclusion is (and pardon the legalese): meh.

Huizhou is not a big city and no one is really going to pay attention to the court’s ruling against this retailer. From what I can tell from bits and pieces out there in the press, the judgment does not enjoin Apple or other retailers/resellers from doing anything, and I therefore do not expect that this case will have any significant spillover effects.

Keep in mind that we already know that Proview (Shenzhen) is the current owner of the mark. A finding of infringement is hardly a surprise here.

Why did Proview file in Huizhou at all? I have no direct information here, but I suspect a bit of forum shopping. They found a good target and a friendly forum, and they pulled the trigger.

If anyone out there is freaking out after seeing a headline like “Chinese court finds against Apple,” just relax. This is not the main event, not even close. This is Proview making mischief, a tried and true legal strategy, so that Apple will come to the bargaining table.

How about that Shanghai case? Again, this is an infringement action. On the merits, simply based on who owns the mark today, Apple loses easily. But before you begin hyperventilating, let me point out that the case isn’t as simple as all that.

This entire dispute is uncommonly messy. We now have a commercial dispute at the High Court in Guangdong and will soon have a related, but separate, infringement case in Shanghai. Technically speaking, these two cases could be decided separately, each on its own merits.

And that could happen. At the end of the day, no one knows for sure.

But let’s face it, folks, this is now a very high profile case which has no doubt attracted political attention at the highest levels. Moreover, the Shenzhen case involved some gray areas in Chinese commercial law. As a lawyer friend said to me the other day, “You can bet that Xi Jinping got some questions about this case when he was in Washington.”


The Shanghai court case might proceed, but is the court going to issue a judgment before this whole fight gets hashed out at higher levels? I sincerely doubt it. And since we’ve got courts in different provincial jurisdictions, I would guess that means informal discussions via the Supreme Court.