- Apple – large multinational corporation that makes cool stuff and relies heavily on its brand name and product design
- Proview Technology – Shenzhen electronics manufacturer
- Unnamed third parties — shanzhai manufacturers, makers of your favorite iPad knockoffs
- Shenzhen eBook Forum – top venue for touting shanzhai ebook readers, including iPad clones
- The China iPad trademark will be auctioned off at the Shenzhen eBook Forum on April 10.
- The iPad mark starting price will be US $3.65 million, based on what Apple reportedly paid to Hanwang for the iPhone mark.
- The ipad.cn domain name will also be part of the auction, with the starting price set at US $30,000.
Oh boy, is this going to be good or what!?! Yeah, not so much. The auction was canceled.
Could have been epic, but it wasn’t. The company that holds the iPad mark, Shenzhen Proview Technology, doesn’t seem to have a good IP strategy. They registered “IPAD” in 2000 in Class 9 (includes computers — see pic left and below), so in a head-to-head fight with Apple over ownership rights, Proview would doubtless emerge as the victor. No evidence of a bad faith registration.
But wait. There is another pesky rule in the Trademark Law that comes up from time to time when someone wants to challenge a registered trademark: non-use. The trademark system recognizes that there are only so many possible word/letter combinations out there. No one should be allowed to monopolize a trademark unless they actually use it.
China’s Trademark Law covers this eventuality in Article 44(4), which provides that a registered trademark may be canceled if use of the mark has “ceased for three consecutive years.”
And in the case of Proview and the “IPAD” mark, you guessed it, they screwed the pooch and didn’t use the mark, opening themselves up to a non-use cancellation action. This would have been easily avoided – “use” is a very broad concept that even encompasses things like newspaper advertisements. Put an ad in a paper that uses the mark once every three years and you’re all set.
Apparently the non-use cancellation, presumably filed by Apple or a related third party (legally can be anyone), is pending. These things can take some time, and I’m not sure when the action was filed.
So here’s what happened, as idealized in my caffeine and sugar-soaked brain:
Proview Employee: You know, we own the “IPAD” trademark.
Proview Boss: No shit?
Employee: I wouldn’t lie to you.
Boss: No shit. What are we doing with it?
Employee: Absolutely nothing. We’ve had it since 2000.
Boss: You got any ideas?
Employee: Well, sure. You know the iPad was just released by Apple?
Boss: Yeah. In fact, I was just reading about all the shanzhai clones on China Hearsay.
Employee: I have a feeling a lot of people will want that trademark. So why should we waste our time negotiating with everyone? Let’s just auction it off!
Boss: Sell it to the highest bidder? Damn fine idea, lackey. So what if some shanzhai company gets the mark? Screw Apple anyway. If I can’t have Flash on my iPhone, they can’t have that trademark.
Employee: Well put, sir. We can throw in the domain name as well.
Boss: Nice touch. You sure we own that trademark?
Employee: Absolutely, sir. There is one thing, but, uh, it’s such a small matter that I hesitate to bring it up in the first place.
Boss: Tell me now, or tell me after I’ve slapped you and made you cry. Either way is fine with me.
Employee: I’ll tell you now. We haven’t used that mark for several years, and our lawyer says that it could be canceled because of something called non use. In fact, someone has already filed an action against us on those grounds.
Boss: You think if we held an auction, the bidders would know about this?
Employee: Hard to say, sir. Some of them might be stupid enough to buy it anyway.
Boss: Hmm. I say let’s move forward with this! How about we do it at the Shenzhen eBook show? Get it over with quickly before this non use thing becomes public.
Employee: Very good, sir.
Boss: We’ll start the bidding at 3.5 million dollars. If we get the money, there will be a sizable bonus for you, say RMB 500?
Employee: You really shouldn’t, sir.
Boss: I know, you don’t deserve it. However, since you are my son, I might as well.
The rest, as they say, is history.
If Apple did this the normal way, they filed an application for “IPAD” in Class 9 at the same time that the non-use cancellation went forward.
If all goes well, the Proview mark will be cancelled and the Apple application will lead to a registration.
All of this may take a long time, though. In the meantime, Apple does not own the “IPAD” trademark in China. Will they cut an interim deal with Proview?
The suspense is killing me.
Not a lot out there, but you can go here for some additional information:
Article on Sina Tech News on original announcement. (??)
Article on Sina Tech News on cancellation of auction. (??)
Article in Jakarta Globe that includes discussion of global trademark problems of Apple, including iPad and Proview. Focuses on Indonesia and is quite critical of Apple’s IP team, but has a lot of good info.
Notice on Chinesestock about termination of auction.