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Apple claims firm broke trademark agreement

By Wang Huazhong, Cao Yin and Tuo Yannan (China Daily)

08:30, February 16, 2012

BEIJING - After a number of online stores suspended sales of Apple's iPad, the US tech giant accused Proview Technology of not honoring its agreement to transfer the rights to use the trademark for the product in China.

Many Chinese online stores, including Amazon China and Gome, pulled the iPad after local administrations of industry and commerce seized loads of the popular tablet computers from a second-tier city.

"We bought Proview's worldwide rights to the iPad trademark in 10 different countries several years ago," according to a statement Apple sent to China Daily on Wednesday.

"Proview refuses to honor their agreement with Apple, and a Hong Kong court has sided with Apple in this matter," according to the statement, which also said the case is still pending on the Chinese mainland.

Proview Technology Shenzhen holds the trademark it registered in 2001, according to the official website of China's trademark authority. It claimed Apple made a deal to buy the iPad trademark from Proview Technology Taiwan, a company associated with but still a separate entity from the Shenzhen company.

Gome, a major electronic appliance store in China, is the latest to suspend sales of the iPad online, though it said on Wednesday its "stock is abundant".

"We will not stop selling iPad in brick-and-mortar stores until the final verdict on Apple's case is out," said a public relations worker with Gome.

Amazon China also told China Daily that the iPad has been unavailable online "according to Apple's sales policy".

"Apple hopes the iPad will be sold offline," said a public relations worker with Amazon.

Media reported 360buy.com, another popular online store, suspended iPad sales for hours on Tuesday.

Over the past few weeks, Apple has been uncommunicative, while the Shenzhen company has reached out to the media about its repeated complaints to market regulators and sent pleas to customs officials to impose an embargo on the iPad 3, which is expected later this spring.

Apple's statement did not specify from which company underneath the Proview umbrella it had acquired the iPad trademark.

Xie Xianghui, a lawyer representing Proview Technology Shenzhen, said Apple's "partial" reply is meant to confuse the public.

He added that the verdict in Hong Kong will not have any influence on other trials on the mainland - where the two companies also sued each other for the copyright - because of the different legal frameworks.

Xie countered Apple's claim that the Hong Kong court sided with it in the dispute.

"Apple is worried the iPad trademark will be resold before the hearing is finished, so it asked the Hong Kong court to forbid Proview Shenzhen from doing that," he said, adding that the court's decision to prevent the trademark from being transferred cannot be seen as showing that it has ruled in favor of Apple.

It is uncertain at this time when exactly the trial will begin in Hong Kong, and the lawyer said the evidence exchange has begun and will last until March.

Yu Guofu, a Beijing-based lawyer specializing in intellectual property rights, said the verdict of the Hong Kong trial or that of the mainland will not have any influence on one another or vice versa.

"The root cause of the dispute is Apple' underestimation of the legal complications in China," the lawyer said, adding the case also serves as a warning to companies in China to think twice about risks before "going abroad".

However, Yu said the sale of the Apple's products, including the iPad, will not be affected by the lawsuit, because what customers care about is the quality.

"The way out for Apple might be changing its product's name soon or buying the trademark from the Proview Technology Shenzhen," he suggested.

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