The first thing to keep in mind about what went on today in Shanghai is that nothing much went on in Shanghai today. Yes, Proview, the current owner of the “iPad” trademark in China, squared off against Apple, the hopeful future owner of the mark, in a court in Pudong, Shanghai.
There was a four-hour hearing that was attended by every single reporter in the known world. No judgment was issued (of course), and no date was set by the judge for further action.
Are you bored yet?
Here’s some miscellany (the quotes are from CNN):
Q: Some press accounts say that the “iPad” trademark in China is at stake in this case. Is that true?
A: Not exactly. The question of ownership of the mark will be decided by the Guangdong High Court in a separate commercial dispute. This one in Shanghai is a trademark infringement case and will only determine whether Apple is infringing on Proview’s trademark rights. Should the judge determine that Apple is infringing Proview’s mark, Apple could be told to stop using it; that’s why the case is worth talking about.
Q: Proview’s lawyer says that a judgment will be issued very soon. How does he know that?
A: Good question, but don’t assume that what he says is based on reality. Might there be a ruling issued soon? Possibly, but there’s no reason to expect that to happen. Indeed, if I was a betting man, I would guess that the judge is going to sit on this for a while pending the case in Shenzhen. (The “Famous Last Words Rule” is now in effect. Now that I’ve said this, don’t be surprised at a quick judgment that will make me look like an idiot.)
Q: Apple was quoted as saying: “Proview has no product, no markets, no customers and no suppliers. It has nothing.” Why is this relevant?
A: It isn’t. This is a trademark infringement case. Whether Proview is currently using the mark in commerce is not important. What matters is whether they are the current registered owner. I have no idea why Apple made that statement.
Q: They also said: “Apple has huge sales in China. Its fans line up to buy Apple products. The ban, if executed, would not only hurt Apple sales but it would also hurt China’s national interest.” Is this persuasive?
A: Yes, although it’s not a legal argument. The extent of Apple’s sales in China is not relevant to the determination of infringement. However, if Apple wanted to not-too-subtly remind the judge of the political implications of this case, this would be the way to do it.
Proview responded with: “Whether people will go hungry because you can’t sell iPads in China is not the issue. The court must rule according to the law. Do you absolutely have to sell the product? Can’t you sell it using a different name?”
Proview is absolutely right. Legally. But the politics of this case are in Apple’s favor, and I suspect Proview is well aware of this reality.
Q: If the Shanghai court does rule before the Shenzhen court, what could happen?
A: First, whoever loses will appeal. That means that we’d still be in a holding pattern in terms of enforcement, relying on the discretionary powers of local authorities.
Second, there are quite a few different things a judge can mandate in an infringement case, some of which depend on the specific corporate entity that is being sued. Generally speaking, this can include injunctions against manufacturing, sales, marketing or licensing — basically the range of uses of a particular mark. Of course, you can’t order a company to stop manufacturing, for example, if it isn’t in that line of work.
Apple does not conduct all business related to the iPad in China with one single corporate entity. We know for example that Foxconn manufactures these things under license. As this case illustrates quite well, “Proview” doesn’t necessarily include all of the Proview group companies, and the same can be said for “Apple.”
Suffice it to say, this kind of determination can be complex, and when it comes to enforcing such a ruling, things can get even more complicated.
Q: So which case is more important, Shenzhen or Shanghai?
A: The Shenzhen case will determine who owns the trademark, so in my mind, that’s the biggie. The Shanghai case is a relatively simple (in terms of trademark law) infringement suit, and we already know who currently owns the mark. That being said, if the Pudong court decides to make some headlines and issues a quick ruling, a lot of heads will explode.