This article first appeared in Entertainment Law Matters, a Frankfurt Kurnit legal blog.

Chinese newspaper Xinhua News Agency reports that Apple may be unable to use the iPad mark in China in connection with its tablets unless it first purchases the right to do so from a Chinese company called Proview Shenzhen. Apparently Proview Shenzhen registered the IPAD trademark on the Chinese mainland in 2001 (prior to the launch of the iPad tablet by Apple). In 2009, Apple allegedly bought the rights to use the mark from Proview Taipei, an affiliate of Proview Shenzhen (the two companies appear to have the same parent) for a sum of approximately $55,000. Proview Taipei had registered the IPAD mark in a number of countries and regions including Taiwan but did not own the mark in mainland China. The dispute appears to be whether the agreement with Proview Taipei is binding on Proview Shenzhen.

Apple brought an action against Proview Shenzhen claiming that ownership of the mark should be transferred to Apple per its agreement with Proview Taipei. The Municipal Intermediate People's Court in Shenzhen rejected Apple's claim earlier this week. Apple may appeal the decision.

In the meantime, Proview Shenzhen, which is a manufacturer of digital displays and is now on the brink of bankruptcy, is claiming approximately 1.6 billion US dollars from Apple for its infringement (Apple began selling iPads in China early last year). They have also commenced lawsuits in two Chinese courts seeking to stop Apple from selling the iPad in China.

The cost of this to Apple has the potential to be significant. According to news articles, Apple claims that its Shanghai and Beijing stores generate the highest revenue of any of their stores.

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