Apple suffers China blow as local court enforces iPad sales ban, others may follow

Apple has been dealt a blow in its ongoing battle over the iPad trademark in China, after a court in the southern part of the country ruled that local distributors must stop selling the iPad due to the company’s ongoing legal case.
According to a report from the Associated Press, a court in Huizhou found that sales of the device from local retailers and distributors violated the trademark rights of Proview, the company which first took Apple to court over the issue in 2010.
Proview has claimed it will push for a trade ban, however, its chairman Yang Rongshan appears to be seeking a payout, after demanding that Apple must “properly” compensate the Taiwanese firm if it wants to use the term ‘iPad’ in China.
Yang’s comments came the day after strong evidence suggesting that Apple does owns the patents came to light. A report from AllThingsD revealed the compelling evidence that Apple has in support of its argument that it has already purchased the trademark in China.
Apple is appealing the court’s decision, which awarded the rights for term to Proview, insisting that it had purchased the trademark from the company for $35,000 in 2010. However, Proview claims that a deal was made with affiliates despite the fact that Apple has records of emails from Proview’s legal staff in China confirming the sale of the trademark in the country.
The case developed significantly last week as a number of stores and online retailers stopped selling the device in the country, although Apple is reported to have requested that the iPad was removed from online stores which were not registered to sell it.
Chinese authorities have ruled that a ban on importing the iPad may be “difficult” to introduce, however, more city courts likely to rule on the possibility of local retail bans. A Shanghai court will hear a similar case on Wednesday and it remains a possibility that sales of the iPad may be halted in parts of the country while the court case is in progress.

Apple appeals against iPad trademark decision in China

Having lost its entitlement to the iPad trademark in China, Apple has appealed a court ruling that asserts a local monitor company owns the right to the iPad name, limiting the impact of potential trademark infringement lawsuits in the future.
ComputerWorld reports that Apple appealed the ruling on January 5, having been passed in December 2011. It filed it with the Higher People’s Court of Guangdong Province, according to a statement from Proview International, the Taiwanese company that claims it controls the iPad trademark in mainland China.
Proview says that it still owns the “iPad” trademark for mainland China, after selling off trademarks for other regions of the globe to a company associated with Apple in 2006 for $55,000.
The company claimed back in October 2010 that when it sold the iPad trademarks to a company called IP Application Development, which was apparently buying the trademarks for Apple, the sale of the “global trademark” did not include two trademarks in Mainland China.
Proview also registered trademarks in the EU, Mexico, South Korea, Singapore, Indonesia, Thailand and Vietnam, which appear to have been snapped up by Apple. The Cupertino-based company purchased the US trademark from Fujitsu.
Apple had originally sought to gain control of the trademark by filing a lawsuit against Proview but in December, the Shenzhen Municipal Intermediate People’s Court rejected Apple’s claim. The court ruled that the transfer was only made through Proview’s Taiwan subsidiary and that its China-based company did not formally transfer trademark rights.
Computerworld adds:

Xie Xianghui, a lawyer representing Proview, said that Apple had asked for the transfer of the iPad trademark to it in the appeal. It is also asking for compensation from Proview to the tune of 4 million yuan ($636,204) in legal fees.
Apple’s appeal claims that Proview’s Taiwan subsidiary was acting as a representative for Proview’s Shenzhen-based company, he said. But Proview maintains it had no such relationship with the Taiwan subsidiary, and was not in any talks about transferring the iPad trademarks, Xie added.

Proview has reportedly already started legal proceedings against Apple and Chinese retailer Gome, pushing for both companies to stop selling products using the iPad name.

New partnerships could see Apple sell 40m iPhones in China this year, says report.

Analysts at Morgan Stanley have predicted that Apple could sell more than 40 million iPhones in China this year, but only if the company partners with new operators in the country, according to a report from Apple Insider.

In a note to investors, Morgan Stanley’s Katy Huberty revealed that, as things stand, the firm foresees that Apple could reach a maximum of 10% of China’s 150 million “high-end mobile subscribers” through its exclusive partnership with China Unicom. However, the addition of relationships with China Telecom and China Mobile could see the Cupertino-based firm more than double its sales in the country, Huberty said.

China Telecom is rumoured to be all set to begin selling the iPhone, after it reportedly gained regulatory approval, while China Mobile may not be far behind. The world’s largest operator has long been a rumoured target for Apple, and the companies will reportedly come together when the carrier has finished testing its new 3G network in March.

According to the bank’s research, a China Telecom partnership could add between 2-4 million new devices. While, assuming that the device reaches 20% of China Mobile’s subscriber base, as it has with Unicom, Huberty estimates that a partnership with the operator could sell 24 million devices this year, rising to 36 million units by 2013.

China Mobile has more than 10 million iPhone users on its network – despite not having an official partnership with Apple – and there is no doubt that adding the 640-million-customer-strong carrier would massively increase Apple’s reach in China.

That said, recent reports have shown the iPhone effect is being overshadowed by other devices for China Unicom. The operator has added a record numbers of 3G subscribers and boosted its market share through the sales of more affordable devices, that are up to 80% cheaper than Apple’s smartphone.

Apple’s iPhone 4S launch caused controversy and, though the device sold out on launch day, scenes of chaos and violence at its Sanlitun store prompted Apple to later call-off sales of the phone across the country.

While there is no doubt that Apple is popular amongst Chinese consumers, it remains unaffordable to a great many in the country, despite the growing affluence of China’s middle class. As we suggested last year, a lower-priced device would be hugely disruptive for China and Asia in general, which could open Apple and the iPhone to new demographics.

Image credit: Flickr user williamhook