iPad Trademark Dispute Update: Why Haven’t the Apple Stores Been Shut Down?

February 8, 2012

Nice to see this entertaining story finally (what took so long?) hit the mainstream press. If you somehow missed all my previous posts on the topic, check those out here or search for “proview” on China Hearsay.

The only real news this week regarding the dispute between Proview and Apple over the iPad trademark is that Proview has apparently filed an enforcement application with the Beijing Administration of Industry and Commerce (AIC). I’ll turn to that in a second, but if you’re keeping score at home, that means we have a pending appeal to the High Court on a Shenzhen contract-based lawsuit that Proview won at the lower level, and a trademark infringement case that Proview filed in Shanghai.

Since Proview is the legal owner of the iPad trademark in China and, as far as we know, Apple has no good evidence that Proview filed the trademark in bad faith over a decade ago, it certainly looks good for Proview in both cases, particularly the one in Shanghai.

So what’s with the AIC action in Beijing? Unfortunately none of the press accounts bother to mention who the AIC is or what Proview is asking them to do. Surprise surprise. No one bothered to do any research on an IP matter — once again. Everyone is piggybacking off a Beijing Evening News report that was picked up in English by Global Times. Most of the foreign media reports have (still) not done any real reporting on this.

If you therefore are confused about AIC, here we go. This is a government agency that has a very wide portfolio. It is a federal (State-level) agency — you will see references to SAIC, with the “S” meaning “State” — that has local offices (AICs) nationwide at different levels. The office in question here is the Xicheng District office of the AIC in Beijing.

Among other things, the SAIC incorporates China’s Trademark Office, so if you are thinking in terms of an organizational chart, the SAIC would be above that of the CTO. Additionally, local AICs have the authority to handle intellectual property infringement cases that involve trademark and unfair competition. In the case of the iPad dispute, we are dealing with trademark infringement.

What can the AIC do? It can raid premises, seize documents, equipment, products and counterfeit marks, and it can halt activity and lock down businesses. Once AIC makes a decision about infringement, it can order fines (these go to the government, not the trademark owner), revoke business licenses, and mandate a public apology.

Note that an AIC raid is often used by trademark owners as Step 1, with a civil lawsuit as Step 2. It would be interesting to know if Proview and its lawyers filed the AIC application in Beijing before filing the civil suit in Shanghai, and whether they have approached other AICs.

OK, so once again, in addition to the contract action in Guangdong, we have an infringement suit in Shanghai, and a pending AIC application in Beijing. According to the Beijing Evening News, which apparently talked to AIC, the authorities are sitting on this for the time being. Why is this happening?

I can only speculate that it’s political. Look, Beijing AIC can certainly claim that since this case involves a pending civil suit, they feel obligated to step back and wait for a resolution from the court in Guangdong. Maybe.

But AIC could act if it wanted to, and the court action is Guangdong is now an appeal that most folks expect Apple to lose. Proview is the owner of record of the trademark, and the infringement is crystal clear. No reason at all that AIC could not raid all the Apple stores and resellers in Xicheng District and effectively shut down all iPad sales there.

No, really. They could do so tomorrow if the political will was there.

So why are they sitting on this? My guess is that this one is just too high profile, Apple has too much clout (Proview who?), and AIC is worried about blowback. The pending court action is great cover behind which AIC can hide until, hopefully, a settlement is cobbled together by the parties.

In other words, don’t expect to see AIC officials come crashing through the door at the Sanlitun Apple Store tomorrow. Just understand that they could if they wanted to.

One thought on “iPad Trademark Dispute Update: Why Haven’t the Apple Stores Been Shut Down?

  1. Andeli

    I agree. Another thing is that if the cameras are placed correctly in Sanlitun you could catch the raid going on with Yaxiu selling fake Canadian Goose and Converse shoes in the back ground. No reason to get all involved in this just yet.