The iPAD trademark in China – a sorry tale of woe

News has emerged of a major scuffle in China between Apple Inc and a company called Proview. It is another high profile example of the need to register one's product trademark in China if manufacturing your products there.

This is due to the “first-to-file” trademark registration system in China – whoever is the first to file rather than first to use the trademark wins the day.

In this case, a Chinese subsidiary of Proview applied in the year 2000 for trademark registration of the word “IPAD” and an “IPAD” logo, and obtained registration in 2001. It is likely the word "IPAD" had been coined as a trademark by different parties around the world years before Apple thought of using it for their tablet, and in this case, it seems Proview registered it first in China.

The story goes that Apple negotiated with and purchased the IPAD marks from Proview, and the Taiwanese arm of Proview executed an Assignment agreement with Apple. However, after launch of Apple’s iPad product around the world in early 2010, apparently Proview’s Chinese subsidiary refused to execute an assignment agreement for the Chinese IPAD marks. This prompted Apple to sue Proview and launch cancellation actions against its registrations last year and war broke out.

Proview won the first round of litigation late last year, mainly for the reason that Apple’s assignment agreement for the Chinese trade marks was with the wrong party (Proview Taiwan, not Proview China), and so Apple has filed an appeal which was being heard at the time of writing.

Proview China has now sued Apple for trademark infringement, and is using the various enforcement mechanisms available in China to cause Apple all sorts of grief. This includes complaints to local IP authorities in various cities, some of whom have begun investigating the alleged wrongful use of “iPAD” by Apple, and a request to Chinese Customs to seize Apple iPad products being exported from China.

Most countries have legal procedures allowing trade mark owners, through the lodging of Customs Trade Mark Notices, to stop entry of counterfeit products into a country. However, it appears that the Chinese Customs Trademark Notice and Seizure regime empowers Customs authorities to also seize infringing goods being exported from China. Consequently Proview may succeed in stopping Apple "iPAD" branded goods at the border (assuming Apple's tablet is an "infringing" good, which it appears to be).

There is also news that online retailers in China have stopped selling Apple iPAD products in certain cities around China, for fear of being drawn into trade mark infringement proceedings as a seller of infringing goods. However, a Shanghai court refused last week to grant Proview’s request to restrain Apple’s sale of IPad tablets in that city, preferring to await the outcome of the main appeal first.

Even though the “IPAD” trademark circumstances are perhaps an extreme example of how trademark rights in China work, the message is still worth heeding – it is safer to defensively register your trademark in China as soon as practicable, because if someone else registers your valuable trademark first, they may be able to stop you using it and even sue you for infringement for manufacturing your own branded products in China.