The legal dispute between Apple and Proview over the iPad trademark is escalating and people can't help but wonder whether the issue will delay iPad 3's debut and destroy Apple's reputation.

The Intermediate People's Court in Huizhou, Guangdong had ruled on Friday that a retailer Sundan should stop selling iPads in China, according to various Chinese reports.

However, the impact of the ruling may be limited, for it only affects a single retailer in a single city. Moreover, Sundan might appeal to a higher court. Nonetheless, Proview is expected to continue urging government authorities in 40 cities to block iPad sales. The company may even urge the local government to impose an embargo over export of iPad to other countries.

Proview's founder Yang Rongshan also claimed at a news conference recently that Apple had bought the iPad trademark dishonestly from Proview's Taiwan subsidiary in 2009. At that time, Apple established a small company named IP Application Development in Britain, and the company successfully bought the iPad trademark for several countries from Proview Taiwan for $55,000. without revealing that Apple was the real purchaser. IP Application Development had transferred the trademark to Apple before the tech giant released the iPad in 2010.

Anyways, Proview Technology in Shenzhen, a subsidiary of Hong Kong-based Proview International, has insisted that the deal between Apple and Proview Electronics excluded the trademark rights in Mainland China and Proview Technology still had ownership over those rights.

Meanwhile, Apple has sent a letter to Yang on Monday, threatening to take legal action against Proview as the Shenzhen company has made misleading statements, which could damage Apple's business in China.

The letter demanded Yang to stop releasing false information to the media. Otherwise Apple would sue for damages caused by defamatory statements.

It is inappropriate to release information contrary to the facts to the media, especially when such disclosures have the effect of wrongfully causing damage to Apple's reputation, the letter read.

The trademark dispute between Apple and Proview could also have far-reaching implications as it could also delay the debut of Apple's next generation tablet, dubbed iPad 3, which is expected to be unveiled in early March.

According to a source close to the development in China, unless Apple makes an attempt to resolve the trademark dispute in China, it could jeopardize the company's plans of releasing the new iPad anytime soon. If the dispute is allowed to continue much longer, it would force Apple to postpone any planned launch of iPad 3, the source said.

What do you think about the legal dispute between Apple and Proview? Will it destroy the tech giant's reputation and delay iPad 3's release? Leave your comments below.