Proview Hits Apple With Big-Bucks iPad Lawsuit, Claims It Was Tricked
Proview, the company that's been battling Apple's use of the iPad name in China, recently filed a new lawsuit against the tablet maker in California seeking damages of $1.6 billion. In it, Proview claims Apple and its representatives tricked it into selling the IPAD trademark under false pretenses.
02/28/12 3:16 PM PT
Proview, the company locked in a legal dispute with Apple over rights to the iPad name in China, has fired a new legal salvo. It's filed an amended complaint in California Superior Court in Santa Clara accusing Apple of fraud and unfair competition.
Among other things, Proview's reportedly seeking about US$1.6 billion in damages from Apple.
"There's a lot of money to be made by Proview," Ramon Llamas, a senior research analyst at IDC, told MacNewsWorld. "But make no mistake -- Apple's got a very talented group of lawyers working for it around the clock."
"[The iPad name] is only worth over $1 billion since it's Apple," Maribel Lopez, principal analyst at Lopez Research, told MacNewsWorld.
The claim against Apple is being pursued by Proview subsidiary, Proview Electronics (Taiwan).
Proview representative Liz Cohen declined to comment on the record for this story.
Proview Taiwan claims that it was fraudulently induced to enter an agreement to sell the IPAD trademark in various countries.
It claims that Apple was running out of time to acquire the trademark prior to announcing its tablet in January 2010. However, Cupertino knew from having dealt with Proview Taiwan previously that the company opposed the use of similar trademarks.
Apple turned to an intermediary, Farncombe International, and its managing director, Graham Robinson, to help create a false pretext for the purchase of Proview's IPAD trademark, the claim alleges.
Apple created a front company, IP Application Development, also known as "IPAD Ltd.," and concealed the fact that this firm was its agent, the complaint claims. Robinson used an assumed name, Jonathan Hargreaves, for the negotiations with Proview Taiwan over the sale of the trademark.
Robinson allegedly told Proview Taiwan that IPAD Ltd. wanted to purchase the IPAD trademark because this was an abbreviation of the company's name, Proview Taiwan charges. It also accused Robinson of evading direct questions about the nature of IPAD's business and of promising that IPAD Ltd. would not compete with Proview.
Robinson apparently also threatened legal action to coerce Proview Taiwan to sell the rights to the IPAD name.
Although some technology companies do create special-purpose vehicles in order to obtain trademarks, the function of IPAD Ltd. was intentional misrepresentation and to fraudulently induce Proview Taiwan into selling the IPAD trademark, Proview Taiwan claims.
"It's very common for a company to buy a name or product for another company to keep things under wraps," IDC's Llamas pointed out.
Will the Real Proview Please Stand Up?
Proview appears to be a conglomerate of companies. There's Hong Kong-based Proview International Holdings; then there's Proview Technology Shenzhen, a subsidiary that filed suit against Apple over the iPad name in China.
Another subsidiary, Proview Electronics (Taiwan), filed suit against Apple in Santa Clara. It has amended its complaint to allege fraud, among other things.
There's reportedly yet another subsidiary in China, Ningbo Prowell. A Chinese court apparently ordered Proview International to sell off Ningbo's assets.
Somewhere in there, Taiwanese firm Tatung may have a presence. It reportedly took a 16 percent stake in Proview International in 2007, but its two directors resigned from Proview International's board in 2011.
Who Owns the Word?
Proview Electronics (Taiwan) had trademarked the IPAD name in the EU, China, Mexico, South Korea, Singapore, Indonesia, Thailand and Vietnam between 2000 and 2004. It reportedly sold rights to the iPad trademark in these countries to IPAD Ltd. in 2006 for about $55,000.
However, the IPAD name had been trademarked independently in China by Proview Technology (Shenzhen) in 2000, and litigation over Chinese rights is a separate issue altogether to the current suit in the Santa Clara court.
Proview Shenzhen was apparently trying to transfer its rights to the IPAD trademark in China to yet another subsidiary, Yoke Technology, early last year.
Proview International is deep in debt, and trading in its shares was suspended by the Hong Kong Stock Exchange in May following legal proceedings by Chinese creditors. The company may be delisted from the exchange if it can't get its affairs in order by June.
"If Proview's smart, it will settle for some nice, undisclosed sum and use that to pay its debts," Lopez said.
Who Wants an iPad?
"If Proview was to win [its litigation in China], that would only affect customers looking to buy an iPad in China," Philip Solis, a research director at ABI Research, told MacNewsWorld. "It wouldn't affect [people there] who already had one."
Consumers "will buy [iPads] no matter what they are called," Lopez said.
Apple did not respond to requests for comment for this story.