updated 10:00 pm EDT, Tue March 13, 2012
Accused of deliberately hiding deal from creditors
Apple's lawyers, fighting previous 'iPad' trademark holders Proview in a high-stakes case in Guangdong, told the court today that the Hong Kong-based company deliberately structured the original deal to hide the money from creditors in mainland China, and are just trying to squeeze more money out of a company they now know has deep pockets in order to help recoup massive debt. Proview now owes about $400 million, reports the Wall Street Journal.
A spokesperson for the company read from a prepared statement, said that Apple was deliberately mislead by Proview and "didn't know at the reasons at the time" why the deal had to be concluded in Taiwan. Proview's position is that the trademark attorney hired by Apple at the time simply "made a silly mistake," according to Proview attorney Xiao Caiyuan.
Proview is still smarting from having sold the trademark to the name "iPad" on a worldwide basis to a proxy company created by Apple to hide the identity of the real buyer, as revealing it would have driven up the price of the trademark. Apple bought the rights for $55,000, a sum undisputed by either side.
Documents provided by Apple show clearly that the front company, Intellectual Property Application Development Limited (IPAD-L), bought the trademarks in China and elsewhere, but the Shenzen branch of the company has variously claimed that the Taiwan branch didn't have authorization to sell the name, that creditors own the name, that Proview only retains rights to the name in China, and that Apple somehow tricked the company into selling the name -- the latter charge being floated only in US lawsuit rather than in China to avoid the obvious contradictory positions that would require taking.
"Proview still thinks both sides can solve the dispute by peaceful talks," Xiao is quoted as saying. Proview won the first round of the legal battle in Shenzen provincial court, but lost when Apple appealed in the Hong Kong jurisdiction.
Proview's appeal to the Higher People's Court in Guangdong is expected to be a definitive win for either company, but it is unclear if the bankrupt display maker can hold off insolvency for much longer. Proview's creditors, which include eight of China's largest banks, have already moved to liquidate the company to resolve the firm's debts.
A win the case is vital to both companies: if the court rules that Proview retains the iPad trademark in China, Proview can ask for an import and export ban, essentially creating a worldwide ban on the iPad, as they are mostly made in China. If Apple wins, Proview's creditors will liquidate the company, as the potential iPad trademark is seen as the bankrupt firm's only real asset. [via Wall Street Journal]