The latest news from Apple’s heated round of talks over the iPads legal future in China show no particular signs of cooling, as the Guangdong authorities have told the parties involved that they must first mediate the dispute amongst themselves. An official from the State Administration for Industry and Commerce (SAIC) stated yesterday that Proview, Apple’s former partner and claimant to the iPad trademark, is the legal owner of the the iPad according to Chinese law. Proview maintains firmly its stance that it has never sold the coveted iPad trademark to Apple, as the Cupertino-based company continues to claim.
How It Began
Apple has been locked in a battle in China since it was ruled late last year that the iPad trademark legally belonged to Taiwanese-based manufacturer Proview, known for producing monitors for computers and for its remarkable financial difficulty in recent years. When the dispute took form in 2010, Proview’s chairman Yang Rongshan notably stated to the Financial Times that it would be able to “sort out part of the [financial] problem” by addressing what he described as Apple’s arrogant entrance of the iPad in the Chinese market. It is seeking legal damages as high as $1.6 billion from Apple based on its claim that the California-based company never legally owned the iPad trademark in China.
To add further complexity to Apple’s already bothersome legal headache, Yan Xiaohong, vice chairman of the National Copyright Administration, stated yesterday that pirated copies of Chinese literary works have been distributed on Apple’s App Store since March 22nd, as reported by Xinhua.
What are the potential damages?
The outcome of the legal battle will be a large determinant of Apple’s overall strategy in China, as it remains unclear how the law will be interpreted in the coming months. Given the fact that some authorities have already begun recalling iPad units from shelves, the potential consequences for Apple are catastrophic. China is Apple’s second-largest market, according to figures released last year, and it will continue to be a strategic market for them going forward. Last year China accounted for 16 percent of Apple’s fourth quarter sales, according to Bloomberg. They cannot afford to lose this market if they wish to continue their expansion plans.