Apple buys trademark, may soon offer new iPad to China

A Chinese court on Monday said Apple Inc. has settled a lingering dispute with a local technology company concerning the use of the iPad trademark for the California-based tech giant's popular tablet computers in the Chinese mainland.

This development in the two-year legal tussle is seen by some market analysts as Apple's stepping stone for bringing its New iPad to eager Chinese consumers. The product is in the process of getting final approval from authorities, people familiar with the matter said.

Apple has paid 60 million U.S. dollars to Proview Technology (Shenzhen)for the trademark, the Higher People's Court of Guangdong Province said in a statement issued Monday. The State Administration for Industry and Commerce was asked to assist the transfer of the iPad trademark to Apple, the court said.

It said the settlement agreement went into effect on June 25.

"All parties involved have agreed on the settlement. Proview and Apple now no longer have a dispute over the iPad trademark," said Xie Xianghui, a lawyer for Proview Shenzhen, a debt-ridden manufacturer of computer screens and LED lights based in Shenzhen.

"We think the iPad trademark is worth more than the amount Apple will pay. It is not satisfactory, but it is acceptable," Xie said.

Proview Shenzhen had previously claimed that the Taipei subsidiary of its Hong Kong-based parent company, Proview International Holdings Limited, registered the iPad trademark in a number of countries and regions as early as 2000.

Though Apple bought the rights to use the iPad trademark from Proview Taipei in 2009, Proview Shenzhen said it reserved the right to use the trademark it registered on the Chinese mainland in 2001. The two sides have since been entangled in a drawn-out legal battle.

Guangdong's higher court heard the case in February, as Apple and its proxy for the trademark purchase appealed a previous court ruling by the Shenzhen intermediate court in favor of Proview Shenzhen.

In June, Proview Shenzhen was brought to court in a bankruptcy case. Its creditors demanded that the court have the company liquidated, as it took a tumble in the 2008 global financial crisis and allegedly owed more than 400 million U.S. dollars to eight Chinese banks, according to media reports.

The sum in the iPad trademark settlement is small, but market analysts say Proview Shenzhen is eager to get the money to repay its debts.

For Apple, the settlement can help it seize huge market opportunities in China. Otherwise, Apple might not have been able to sell its popular tablet computers in the Chinese mainland.

"Apple wants to buy its way into the Chinese market, while Proview wants to use the money to cover its debts," said Li Xiaoning, a Guangdong-based lawyer familiar with the case. "It is a good deal for both of them."

China is Apple's second-largest market after the United States. China contributed 7.9 billion U.S. dollars, or about 20 percent of Apple's revenues, during its second fiscal quarter in 2012, the company said.

Apple's iPads have become so popular among the country's younger generation that parents worry that children growing up with iPads glued to their hands will be more likely to become near-sighted, physically weak and socially inactive.

Market observers predict that when Apple's latest version of the iPad hits the Chinese mainland market, fans will snatch up the product so fast that it will be out-of-stock for most of the year. Meanwhile, more units of the iPad 2 will be sold when the more recent version is launched, forcing a price-cut.

Apple introduced the New iPad to the U.S. market in March, but sales failed to meet market expectations. According to the company's fiscal report, it sold 55 million units of iPads, including less than 12 million New iPads, in the second fiscal quarter of 2012.

"It has already been four months since the New iPad was launched. Apple is looking to tap the huge potential of the Chinese market," Li, the lawyer said. "For the company's benefit, it is a good deal to exchange money with time on the trademark case."

"For China's Apple fans, it is definitely good news. They may get their hands on the New iPad soon," said Gan Guigeng, another Guangzhou-based lawyer, with South Law Firm.