Is iPad 3 Release in Danger? Apple Trademark Battle With Proview Comes to America

 @redletterdave
on February 24 2012 4:42 PM
Given that the most recent court ruling favored Apple, the trademark battle with bankrupt Chinese company Proview is likely on its last legs. The new U.S. lawsuit seems like a distraction and a last-ditch effort to recoup some change from Apple; yet, unli
Given that the most recent court ruling favored Apple, the trademark battle with bankrupt Chinese company Proview is likely on its last legs. The new U.S. lawsuit seems like a distraction and a last-ditch effort to recoup some change from Apple; yet, unlike Proview, Apple can afford to keep fighting this battle in court. Reuters

Proview Technology, the bankrupt electronics maker that uses the iPad name on several of its products such as computer monitors, has reportedly brought its lawsuit against Apple to U.S. soil.

The lawsuit, which was filed in the Superior Court of the State of California in Santa Clara County on Feb. 17, but previously unreported, claimed that Apple had committed fraud when it used a company set up by one of its law firms, called IP Application Development Ltd., to purchase the iPad trademark from Proview on Dec. 23, 2009 for 35,000 British pounds ($55,000), said The Wall Street Journal.

Proview reportedly showed The Wall Street Journal its e-mail thread with a representative purportedly of IP Application Development, who told the Chinese company that it wanted the iPad name because it was an abbreviation of the company's name. The IPAD representative reportedly told Proview that its future products wouldn't compete with Proview's products.

Earlier this month, Proview took its case to the Shanghai Pudong New Area People's Court, hoping to win between $1.6 billion and $2 billion and an apology from Apple. Proview lost the case on Feb. 23, which meant Apple could continue selling its iPad tablet in Shanghai stores.

Apple is taking a pro-active stance in this particular trademark dispute, allegedly appealing a December court decision that ruled in favor of Proview. If Apple can win its appeal set for Feb. 29, Proview could possibly give up its case against the iPad name.

Proview has its back against the wall, as the Minsheng Bank and Bank of China are both reportedly controlling Proview since it fell into debt in March 2009. Consequentially, Proview cannot make any agreements without its creditors' approval.

Yet, the iPad name is all Proview is living on at the moment. Proview still hopes to land an out-of-court settlement with Apple over the iPad name, but Apple argues that Proview is in no position to boss anyone around. The Cupertino, Calif.-based company claims Proview hasn't sold any products using the I-PAD name for several years, and argued that its version of the iPad is much more lucrative for people in China, giving them jobs and tax revenues.

They have no market, no sales, no customers, Apple told Reuters. They have nothing. The iPad is so popular that it is in short supply. We have to consider the public good. Apple has huge sales in China. Its fans line up to buy Apple products. The ban, if executed, would not only hurt Apple sales but it would also hurt China's national interest. 

Proview International, which owns subsidiaries Proview Technology in Shenzhen and Proview Electronics in Taiwan, originally registered the name iPad in Taiwan and in mainland China in 2000 and 2001, respectively. After Apple reportedly bought Proview's trademark under the moniker IP Application Development for $55,000 in 2009, Proview claimed the deal only applied to the trademark in Taiwan. Later, Proview chairman Yang Rongshan said Proview did not know IP Application Development was connected at all to Apple.

It is arrogant of Apple to just ignore our rights and go ahead selling the iPad in this market, and we will oppose that, Yang said. Besides that, we are in big financial trouble and the trademarks are a valuable asset that could help us sort out part of that trouble.

The legal battles between Proview and Apple begin in October 2010, when Proview threatened to sue Apple for damages in China and in the U.S., according to Proview chairman Yang. Reports at the time said Proview registered the iPad name in the EU, China, South Korea, Singapore, Indonesia, Thailand, Vietnam and Mexico, while Apple bought the U.S. iPad trademark from Fujitsu in March. 

Their copy infringement is very clear, a Proview representative said. The laws are still there, and they sell their products in defiance of laws. The more products they sell, the more they need to compensate.

In 2011, after its successful court battle against Apple, Proview then filed separate lawsuits in the local courts of two Chinese cities, Shenzhen and Huizhou, to stop iPad sales in Apple's authorized retailers and stores.

We are starting with these two cities, and if we are successful in getting iPad sales stopped, we will consider going after Apple resellers elsewhere in China, said Xie Xianghui, Proview Technology's lawyer.

We have prepared well for a long-term legal battle, said Xiao Caiyuan, another lawyer representing Proview Technology.

The back-and-forth disputes could possibly derail Apple's plans to build more Apple Stores in China, which didn't receive its first retail store from Apple until 2008. In 2011, six Apple Stores in Shanghai and Beijing produced the highest average revenue of any of its 361 global stores.

Apple is such a Goliath and has a good image, so people wouldn't imagine that Apple could possibly infringe on our intellectual property rights, said Xiao.

In order to legally use the iPad name in China, Apple needs Proview to authorize a transfer of the trademark for mainland China. Without a settlement from Proview, Apple stands to take a significant hit in the world's second largest personal computer market.

Proview's attorney Xie hopes her client and Apple can resolve [the dispute] through peaceful talks, but in the meantime, Proview seeks to immediately block the sale of iPads in the two Chinese cities.

Meanwhile, Apple is getting ready to release its next iPad, presumably called iPad 3, which will reportedly be unveiled on March 7, the release date reported by Rene Ritchie, iMore's editor-in-chief. Ritchie has a solid track record for accurate reporting, particularly with Apple news and release dates. Last August, Ritchie correctly reported Apple's next iPhone would be unveiled in the first week of October and would be called iPhone 4S. At the time, all others called the speculative device the iPhone 5. 

But if Proview and Apple are still embroiled in a legal battle over the iPad name, does Apple have to modify its plans to release the tablet in the coming weeks?

All signs say no. The trademark dispute only applies to mainland China, and even though Apple is fighting Proview on its home turf, there's very little for the technology giant to worry about. Apple would not let a bankrupt Chinese company affect its booming business here in America, nor would it affect a big product launch.

The iPad 3 will reportedly feature improved cameras, a bigger battery, and a dual-LED backlit system to power a stunning 2048 x 1536 display. The dual-LED solution makes the iPad's screen noticeably brighter, but it also apparently solved several puzzling issues with heat dissipation and battery consumption. The next-gen tablet is also said to run on a new new A5X chip, which is likely a step between a high-end dual-core processor and a low-end quad-core processor.

As far as the tablet's shape and size are concerned, leaked images of the shell reveal the iPad 3 will have an identical form factor to the iPad 2, although it will apparently be about 1 mm thicker to accommodate the bigger battery, dual-LED system, and LTE. Qualcomm recently unveiled the fifth iteration of its mobile system-on-a-chip, which supports TD-SCDMA, TD-LTE, HSPA+, EV-DO, embedded GPS, and LTE on TDD and FDD networks worldwide. The chip works with Android and Windows 8 devices, but by targeting so many different carriers, there's a great chance this chip could be featured inside the iPad 3.

Apple has also reportedly upgraded its front and rear cameras for better Facetime and pictures. This is no surprise -- the camera system on the iPad 2 is now considered low-end, given that it only records up to 720p HD and requires tapping to focus. Assuming Apple outfitted the iPad 3 to shoot stills and video like the iPhone 4S, expect autofocus, video stabilization and full 1080p HD video recording.

Another reason to believe the iPad 3 can shoot 1080p video: Starting late last year, Apple reportedly asked several movie studios to submit content to the iTunes Store in 1080p.

Thus far, 1080p HD content has largely eluded users of Apple products, with HD versions of videos on the company's digital download service maxing out 720p (1280 x 720) and chief executive Steve Jobs balking at adoption of Blu-ray on Macs due to licensing complications and other challenges that he said threatened to translate into a 'bag of hurt.' But that could begin to change later this year, as a handful of feature films being submitted to the iTunes Store for a release in the September and October timeframe are being sent with documentation for an optional 1920 x 1080 resolution, according to people familiar with the matter.

Apple is expected to launch a new version of its operating system, iOS 5.1, along with the iPad 3. If this is true, iOS 5.1 could offer support for 1080p HD videos. If this is the case, the update would also apply to the Apple TV device, which currently maxes out at 720p HD. In this way, users could start watching full HD videos on their Apple TVs, Mac computers and new iPads starting in early March.

Given that the most recent court ruling favored Apple, the trademark battle with Proview is likely on its last legs. The new Santa Clara lawsuit seems like a distraction and a last-ditch effort to recoup some change from Apple, which reported more than $100 billion in cash last quarter. Unfortunately, Apple can afford to keep fighting this battle in court. Proview cannot.

Apple announced its best quarter in the company's 35-year history on Jan. 24, enjoying a net income of $13.1 billion on $46.3 billion in revenue. In the final 14 weeks of 2011, Apple sold 15.4 million iPads, bringing the grand total to about 47.5 million iPads in 2011. China revenue, according to Apple CEO Tim Cook, is one of the biggest markets for Apple, accounting for more than 16 percent of the company's annual earnings.

It's our fastest growing major region by far, Cook said.

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