In yesterday’s international business headlines were reports that China’s Intermediate People’s Court of Shenzhen  rejected the claim by Apple that it owned the iPad ©trademark in China.  This was the culmination of a long-running dispute between Proview Technology (Shenzhen) who claimed it had registered the trademark in many countries before Apple came along in China.

An article in Businessworld reported that Proview Technology (Shenzhen) is a subsidiary of Hong Kong headquartered Proview International Holdings Limited which also has a branch in Taipei. It reported that Proview Taipei registered the ‘iPad’ trademark in a number of countries as early as 2000, and Proview Technology (Shenzhen) registered the trademark on the Chinese mainland in 2001, before the launch by Apple. Proview is a contract manufacturer concentrating on flat-screen displays but has since fallen on financial difficulties.

An article in the Financial Times noted that Apple is usually on the receiving end of intellectual property infringements in China, with counterfeits a plenty, and now, by this ruling, the reverse has occurred. It reported that Proview had made an unsuccessful attempt to sell a tablet computer in 2000 and had registered the ‘IPAD’ trademark in seven countries and the EU. According to the FT article, in 2006, Proview Electronics (Taiwan) agreed to sell Apple the “global trademark” for the IPAD name, but the two companies have since disagreed about whether that deal included China.

Apple now faces two dilemmas.  In order to continue selling its tablet computer in China, which it is currently selling very well among Chinese consumers, it must either deal with Proview’s demands for 10 billion yuan ($1.5 billion) compensation for copyright infringement, or come up with another trademark or naming solution.  The second dilemma is the more obvious; IP protection and enforcement works both ways.   The company’s huge success and arrogance comes with certain liabilities, particularly when dealing in international markets where patent laws and legal arguments may differ.

It should remain as no surprise that intellectual property and trademark protection remains as the single overriding concern of many international firms conducting business within China.

Bob Ferrari