iPad case reveals some risks in domestic trademark acquisitions

The 2010-2012 iPad trademark dispute between Apple Corporation and Shenzhen Proview attracted a lot of attention. In that case, Apple came face to face with the legal risks involved in a trademark acquisition. As trademarks become an increasingly important method by which multinational corporations promote their brands, an in-depth review of the legal risks of domestic trademark acquisitions becomes more necessary.

According to reports, in 2000, Shenzhen Proview, a subsidiary of Proview Holdings, secured the exclusive right to use two trademarks – one consisting of the word “IPAD” and the other a combination of the word “iPAD” and a device. Between 2001 and 2004, Taiwan Proview, another subsidiary of Proview Holdings, secured the exclusive right to use eight iPad registered trademarks in the EU, South Korea and other countries.

In December 2009, the IP company established in the UK by Apple executed an agreement for the transfer of the entirety of the iPad trademarks with Taiwan Proview, under which Taiwan Proview transferred the 10 above-mentioned iPad registered trademarks to the IP company. Although the agreement was signed by Yang Rongshan, who was the legal representative of both Shenzhen Proview and Taiwan Proview, it did not expressly list Shenzhen Proview as a party to the agreement. On 3 April 2010, Apple’s iPad tablet went on sale in the US. On 7 April the same year, Apple acquired the 10 above-mentioned iPad registered trademarks from the IP company for the price of £10 (US$15).

In the second half of 2010, the first shots in the Apple and Shenzhen Proview iPad trademark dispute were officially fired. Apple lost at first instance, and at appeal it settled with Taiwan Proview, paying US$60 million to Shenzhen Proview to acquire ownership of the iPad trademarks.

Ma Liwen is a partner at Concord & Partners in Beijing