iPad may have to change its name in China
Despite the fact China had all those hooky Genius Bars, Apple is still facing a 10 billion yuan (£1billion) court case for trademark infringement which could see the sale of iPads banned in two Chinese cities.
Tim Cook, Apple's chief executive, recently told investors that China was key to the company's success, hooting: "China – the sky's the limit there!" Sadly for him, a Chinese court has ruled that Apple slipped up when buying up the rights to the iPad name in 2006.
The "IPAD" name had already been registered over a decade ago by Proview, a computer monitor manufacturer. They claim to have the rights in eight regions, including China, South Korea and the European Union. They agreed to sell them to an agent secretly working for Apple in 2006 for just £35,000.
Paul Schmidt, a lawyer for Baker & Mackenzie (representing Apple) explained that because Apple products are subject to a lot of interest and hype, they had to use a third party to maintain confidentiality.
"Apple faces the dual challenges of maintaining the confidentiality of the product... and ensuring that upon its launch the product can be marketed under the name selected for it," he wrote, in an affidavit to a court in Hong Kong. "In order to meet the second challenge, Apple buys up global rights to its product names, but uses a "special purpose vehicle", he added.
However, Apple's lawyers appear not to have noticed that the rights to the name in China were not actually held by Proview Electronics in Taiwan. Instead, to comply with Chinese law, the company had registered the rights with its arm on the mainland, Proview Shenzhen. All trademarks in China have to be registered with a China-based company.
When Apple asked for the rights to be transferred, Proview clocked on that they were dealing with someone with a lot of money to throw around and promptly demanded $10 million (£6.4 million). Apple refused, sued in a court in Shenzhen and lost.
"Apple was quite deceptive when it first approached Proview to buy the name," said Xiao Caiyuan, the head of the Guangdong Guanghe law firm, which is representing Proview. "They had lawyers in Europe, Hong Kong and Taiwan to look through the paperwork, but they failed to spot that the trademark was registered elsewhere. They tried to claim in court this was because they could not read Chinese!" he said.
Proview has applied to block iPad sales in Shenzhen and Huizhou and its lawyers said that a nationwide ban is on the cards too.
Over on the Mobot side of the office, Lewis has been throwing together all the iPad 3 rumours here.