On Thursday the Shanghai court suspended the lower court’s decision to stop the sale of iPads throughout China. Apple can continue selling the iPad throughout China’s mainland.
In response, Proview has opted to file an action with Chinese customs to stop the exportation of iPads (the result of this is yet to be announced). For the time being restrictions barring sales have been put to rest in Apple’s favor.
Last week Proview Electronics filed a lawsuit in Santa Clara County Superior Court in California against Apple, taking the fight to Silicon Valley. Rumors are Proview alleges that Apple fraudulently misrepresented themselves as “IP Application Development”, a company that wanted to buy the iPad trademark. Moreover, IP Application Development (“IPAD”) never mentioned it was pursuing trademarks for Apple (there was no disclosure of the company being owned by Apple).
The circumstances of this fraud allegation are interesting and perhaps plausible: It was disclosed by a representative from IPAD (Jonathan Hargreaves) in a number of emails between agreeing parties thatt he IPAD company was new and not ready to be publicized. The alias of Mr. Hargreave was, however, a lie and the actual name of the representative was Graham Robinson thereby allegedly committing fraud whilst the sale was occurring.
Logically many companies in the market for buying trademark rights of value do assume an alias to avoid overpriced buy-offs. However, Proview still may have a plausible claim due to the evident creation of a special purpose entity, blatant concealment, and alleged lies on the part of IPAD. Even though the aforesaid may be true Appl,e potentially has a few defenses that may close this floodgate from opening.
1) Apple can argue that it shouldn’t be the one defending because the sale was made to IP Application Development a special entity.
2) According to a copy of the agreement (with reference to Allthings.com) — there has been no stipulation illustrating that Proview wished to have any non-compete protections.
The Bank of China seems eager to handle things outside of court with Apple. However, the founder of Proview Electronics, Mr. Yang seems to insinuate in many cases that the puppeteers of this entire ordeal are the Bank of China. Conspiracy theories! I guess we’ll have to wait and see what happens.
I think that once the Shanghai Court ruled in favor for Apple, allowing the sale of iPads in China a lawsuit in the US was just the “Plan B” – but will ultimately fail. I’m curious to see how much the Bank of China will ask from Apple for the trademark once Proview Electronics goes bankrupt or whether they honor the initial agreement between parties in 2006. Stay tuned.
Guest author Michelle Addison is a law clerk on Tim’s internet law team at Handal & Morofsky, LLC. She is a graduate of the Queen Mary University of London School of Law (LLB Law, Honors), and is completing her US-based LLM at the Benjamin N. Cardozo School of Law.
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