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Monday, February 13, 2012, 10:25 pm PT (01:25 am ET)

Apple struggles in iPad trademark dispute in China as authorities seize units

Local Chinese authorities have begun seizing iPad 2 units in at least one city as Apple faces an uphill climb in its dispute with a Chinese company over the iPad trademark.

Chinese newspaper Hebei Youth Daily (via Xinhua) reported on Monday that officials from the local Administration of Industry and Commerce (AIC) in the city of Shijiazhuang in the northern province of Hebei had confiscated 45 iPad units from resellers over two days. Authorities told the newspaper that they had received complaints of trademark infringement from Proview Technology (Shenzhen), a company that is suing Apple in China over the issue.

According to IP law professor Stan Abrams of China Hearsay, the AIC is a Chinese federal agency that sits above China's Trademark Office. The agency has the authority to "raid premises, seize documents, equipment, products and counterfeit marks, and it can halt activity and lock down businesses," he noted in a recent report.

Apple purchased the international rights to the iPad trademark from Proview (Taiwan) via a front company in 2006, but Proview (Shenzhen) claims that the deal did not include the rights to the trademark in China, since the Taiwanese company was not authorized to sell them.

Proview (Shenzhen) filed suit last year, but Apple countersued. Last December, a Chinese court rejected Apple's suit. Apple appealed the ruling last month.

As a result of the recent inspections in Hebei, retail shops and electronic stores have reportedly begun hiding their iPad inventory. Vendors told one reporter that they were keeping stock in a back room so as to avoid drawing attention from inspectors.


Chinese officials inspect iPad 2 units after confiscating them. | Credit: Hebei Youth Daily


Apple, which has just five official stores in China, does not have a retail presence in Shijiazhuang. The iPad maker does, however, continue to sell its best-selling tablet on its localized online store. An Apple salesperson told AppleInsider on Tuesday that the company was still able to ship iPad orders to Shijiazhuang.

Proview lawyer Xie Xianghui told the Associated Press that the company has filed complaints in more than 20 cities, asking authorities to destroy promotional materials in violation of its trademark.

China online store

Apple's iPad 2 was still listed as "In Stock" on its China online store on Tuesday.


“We haven’t made a demand for economic compensation. We will pursue it through another channel,” Xie said.

Proview is actively pursuing multiple channels in order to put pressure on Apple. Xie said last week that a court in Beijing had readied a 240 million yuan ($38 million) fine against Apple for the alleged infringement. A Shanghai court will hear a lawsuit over the issue later this month.

The company has said it is seeking a total of 10 billion yuan ($1.6 billion) in damages from Apple. According to him, Proview is also demanding a formal apology.

China expert Bill Bishop noted on DigiCha on Monday that, according to Chinese press, Proview is looking to cripple Apple's iPad sales by seeking an export ban from China Customs. Since most of Apple's iPads are manufactured in China, intervention from the country's customs agency could affect the global supply of iPads.

The threat of an export ban in China is even more troubling for Apple as it is reportedly gearing up to launch a third-generation iPad next month. The new device is widely believed to be manufactured by Foxconn and Pegatron in mainland China.

AppleInsider has contacted Apple for comment on recent developments in its dispute with Proview (Shenzhen), but it has yet to hear back from the company.