A few days ago, the story broke that the High Court in Guangdong was pushing a settlement on Apple and Proview in the iPad trademark case. The media reports generally included quotes from Proview (worthless since they are one of the litigants) and some vague pronouncements by the court. Bloomberg had this:
“On the one hand, we are trying to process this case, and on the other, we are working on encouraging both sides to settle,” Zhao Le, an official at the foreign affairs office of the Higher People’s Court of Guangdong, said by telephone yesterday. Zhao said he had no further information on the effort.
Meh. I think that guy probably has that language on an index card taped to his wall in case he gets a call from the press. Chinese courts almost always want a settlement – it’s the preferred harmonious solution.
But the question is whether the court would simply prefer a settlement, or if the judge is pushing hard for the parties to strike a deal. This is the difference between “It would be nice if there was a settlement” and “You guys really need to settle. Or else.”
As I’ve said many times before, the politics favor Apple in this case, while the law is murky. I have no idea how the court would rule in the absence of political considerations, but it’s certainly not clear cut. I believe that the court would be able to cobble together a strong legal argument to support either side.
So is it likely that the court is pushing hard for settlement? Have the lawyers in the case been quietly told to get their clients to agree to a deal or else things might get ugly? Yes, it’s possible. In many cases I’ve seen in the past, the “or else” used by the judge to force a deal is either that the damages would be extremely high/low (depending on the case) or that a judgment would be delayed, perhaps indefinitely. These are very effective tactics.
But I don’t see the usual threats working here. The High Court in this case cannot simply threaten to stall. The case is way too high profile – something needs to happen one way or the other. Moreover, I can’t see the court going to Apple and saying that if they don’t settle, the court will issue sky-high damages. Again, the politics do not favor Proview.
Therefore the court can push, but if, for example, the amount being demanded by Proview is way out of the bounds of reason and Apple says no, I think the court would still act. And that takes us back to the status quo.
More likely, court pressure might help to make Proview bring that number back to reality, and certainly Apple has money to burn; I’m therefore not discounting a deal being struck. On the other hand, Proview owes a lot of folks money, and its hands may be tied on a settlement figure. If it does not receive sufficient compensation for what I assume is (potentially) its last remaining valuable asset, then they’ll have to close up shop. Proview may not therefore have the luxury of compromising.
Don’t take the noise over the settlement negotiations to mean that anything has happened. This process was always going to proceed this way, and a compromise should only be entirely ruled out if and when we hear that the court has actually issued a judgment.