Apple Could Face U.S. Lawsuit Related to IPad Trademark Dispute in China

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A trademark dispute in China over the iPad could spill over into U.S courts, after a little-known Chinese company threatened on Friday to sue Apple in the U.S. for among other things allegedly setting up a "fake company" to purchase the rights to the trademark.

Proview, which has filed for bankruptcy, said it had not transferred the rights to the trademark in China. It said that the U.K. company which purchased rights from its Taiwan subsidiary had promised not to use the trademark to compete against Proview's products.

"I think in the future we will sue Apple in the U.S.," Li Su, a representative of Proview in China, told reporters in Beijing. "We are looking to choose between three different U.S. law firms."

Both Proview and Apple are already locked in on-going court battles in China over the iPad trademark in the country. Following a December court ruling in China that rejected Apple's claims to the trademark, local regulatory authorities across the country have launched investigations into iPad sales, which could result in penalties for Apple and even a customs ban of the iconic tablet.

Proview, which acquired the iPad trademark in China in 2001, said it has already filed lawsuits in Chinese courts, demanding that resellers and Apple's own stores in the country stop selling the iPad under the trademark.

The company now plans to file a lawsuit in the U.S. because Apple allegedly established a "fake company" to acquire the iPad trademark for 35,000 British pounds (US$55,000), Li said.

The U.K.-based company, called IP Application, promised it would not use the iPad trademark to compete against Proview's products, and later sold the iPad trademark rights to Apple, he added.

Apple has said it bought the iPad trademarks in 10 countries from Proview though its Taiwan subsidiary. But Proview contends the iPad trademarks for mainland China were not officially transferred, because Proview's Shenzhen company did not agree to sell them.

Proview began work on its own "iPAD" product in 1998, with the name standing for Internet Personal Access Device. The product, a Windows computer, was a part of Proview's iFamily line, which also included a notebook device, a personal digital assistant and other devices. But the iPAD device failed in the market, said Proview founder Yang Rongshan.

In 2008, Proview lost money because of the global financial crisis, forcing the company to close. Although Proview hopes to make a come back, Yang said it was not using the trademark dispute to take advantage of Apple.

"We are following Chinese law to maintain our rights," Yang said. "We don't have a figure in mind for what Apple should pay. The 10 billion yuan ($1.58 billion) figure the media has reported is not among our company's demands."

Chinese companies have approached Proview about licensing the iPad trademark for use in branding their products, Li said. One company for example wants to use the iPad trademark on an electronics device for children, he said.

Apple maintains it has ownership over the iPad trademark, stating that Proview refuses to honor the agreement. The U.S. tech giant is also appealing a December court ruling in China that rejected the company's claim over the trademark.

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