Proview ready to negotiate on eve of Shanghai court hearing - Page 2

Apple did not create a shell company to hide money. They created one to purchase trademarks while not being extorted. If Apple was the name of the buyer, it would be asked for millions of dollars because it's Apple and not some minor party. Nothing illegal there.

Just like Return of the Jedi and Blue Harvest.

Who knows what Apple will do. They certainly aren't going to pay millions for something they believe they already bought. They might agree to paying for the rights at the previous value which would likely mean no more than what they paid already (which was around $50k). Proview drops their suit and Apple agrees not to sue for defamation etc. Or they might refuse to settle for anything else than Proview honoring the original deal in exchange for dropping the defamation suit. And letting Proview say face by not having it go out that Proview admits they were playing games etc because the terms of the settlement could be kept confidential.

They knew the mark was owned by someone (who ironically was using it for an iMac rip off) and they went and bought it for all 10 countries that said someone owned. Including China. This was before the iPad was even announced. But they did it under a proxy name so the company wouldn't try to inflate the value simply because it was Apple. Proview got mad and recanted China after the deal was signed. They are the ones in the wrong, not Apple.

It could be the pessimist in me, but I wouldn't be surprised by that outcome. My company's experience in China wasn't even close to what leadership thought it would be. Still, I can see Apple prevailing, on merit or name.

Ironic that Proview's most successful "product" could turn out to be their copycat name, a fun pastime practiced by lower-tier Chinese companies.

Now, where did I put my MP5 player... Ah, here it is! Right next to my Vii remote. Anyone care to join me in a game of "Happy Tennis"?

Maybe he was, maybe he wasn't. But he claimed to be and entered into a sale of those assets. Then when he found out who he was selling to for 'real' he changed his claim. That's bad faith dealing if nothing else. At such games deserve being forced to revert to the standings at the time the deal was made in regards to the value of the item in question, not the current value which is way higher.

And if Proview doesn't care to play ball under those rules, personally I think Apple should pull the iPad from sale in China, etc and then pull it from production in China. Let the Chinese government deal with stopping the product smuggling etc (and sue them when they willfully ignore it). And let them deal with the loss of jobs when those lines are cut.

We don't know that. It was illegal to have Chinese affiliation in Taiwan since they were technically at war since 1949. Proview was a Taiwanese company and Yang went around the law and established a holding company in Hong Kong and served as CEO for all 3 companies. Owing money to bank in China is very serious. Yang may be fighting for his and his family's life.

Agreed. Change the name to what it should have been in the first place: iTab or Apple Tablet. Don't give them any money. Let them go under then buy the rights after they go bankrupt. Much cheaper.

Or they can expose the illegality and not waste their time with changing the name for no reason.

He should bear personal liability IMO. But as he is personally bankrupt, such a remedy is of little comfort to Apple.

That is why companies rely upon themselves to do proper due diligence, rather than relying on the representations of individuals or other companies.

ISTM that Proview Taiwan is in the wrong, as is the individual who (presumably) knew that PT did not own the Chinese rights. But Apple cannot get blood from either of these stones.

They have to rely on equitable principles of mistake or fraud or frustration of an essential purpose. That is not as easy as just showing the Judge the contract whereby an owner transfers its rights. In this case, the owner of the Chinese mark was never a party to the contract.

There are three different companies with the name Proview. They are incorporated in three different jurisdictions.

The parent company is from Hong Kong. One sub is Taiwanese, while the other subsidiary is a Chinese company.

Both Proview companies are evidently controlled by the same person.

3 Proview companies. And he lost control of at least one of them a while ago when he declared personal bankruptcy. I don't have any solid knowledge of whether all 3 are in bankruptcy now. But at least one of the 3 is in bankruptcy, and he lost control of at least one of the three some time ago.

If all 3 are now in bankruptcy, he controls none of them. If creditors seized all his assets when he declared personal bankruptcy, he controls none of them.

With the ruckus Proview is causing, is it true Apple has asked Foxconn to accelerate bringing their Brazil iPad production facility online? Could they already be shipping iPad parts to the Brazil facility instead of the China facility? If so, this would be a great coup for Brazil! True, there might be a delay in iPad shipments and constraints upon orders, but this hasnt slowed Apple much in the past. Even if Apple is prevented from exporting iPads, they can still ship parts out of the country. They could even ask Foxconn to ship management and workers to Brazil on temporary visas! Heck! There are plenty of people here in the USA who wouldnt mind moving to Brazil for a chance to work at Apple. Qualified people!

Proview may be risking the wrath of the people of China, consumers and workers alike, as well as their own government if they continue to pursue unreasonable terms. After all, it doesnt take much to change the laser etching on an iPad to change the name just for China.

Proview is not a going concern. Their creditors want to maximize value, and can do so without incurring any wrath.

Sorry, but I've already got a lock on copywriting the best replacement name:

The "ChiPad".

And here, IMHO, is why they're talking settlement:

From a comment by Dan Butterfield over on Apple 2.0:

'via M.I.C. gadget "You may be shocked, the net current liabilities of Proview International amount to 2.87 billion Yuan (456 million U.S. dollars) and its overdue loans reach 3.8 billion Yuan (603 million U.S. dollars). Moreover, all of the Proview International assets, including the trademark IPAD, have been seized as mortgage to eight banks Bank of China,Minsheng Bank, China Development Bank, Guangdong Development Bank, Bank of Communications, Shanghai Pudong Development Bank, Huaxia Bank and Shenzhen Ping An Bank. On November 1 2011, the eight creditor banks of Proview convened a meeting to discuss the negotiation with Apple on the trademark dispute. Since Proviews assets have been frozen by the banks, the eight banks become the beneficiaries of the iPad trademark.".... "So, now you know why Proview is putting so much efforts to get a huge-sum compensation from Apple. The compensation could be the last hope to help rescue the company.""

What this says to me is that the banks are the major driving force behind this dispute. However, just yesterday, we got this little gem from Apple:

"On behalf of Apple, we formally reserve all rights to take further legal action against any individuals and entities for any damages that may result from defamatory statements and unlawful actions intended to wrongly interfere with Apple's business and business relationships."

Now, if Apple is seriously boycotted and is "damaged" by this dispute, then you can bet your bottom dollar that Apple is going to go after those banks for restitution. Now we're talking REAL money!

I think Apple just scared the living cr*p out of those banks.

Ho boy! Pay day is just around the corner! I can smell the settlement money. Rolex watches and Mercedes Benzes for every one!

from the following link, it looks like that proview shenzhen is part of bigger proview. if proview shenzhen tricked apple into one country 2 systems crap, apple definitely can sue them or its creditors for extortion.

also, it is very stupid for apple to have this shell company from london to do some legal stuff in china. hire a local lawyer, please.

here is the link from allthingsD on some detailed emails and document scans:

http://allthingsd.com/20120216/take-...-ipad-dispute/

Apple's case doesn't seem to be very strong, from legal perspective


Apple entered into a contract on the transfer of the trademark with someone who doesn't actually own the trademark. But this guy is actually an affiliate of the actual owner.

The real trademark owner is on the brink of bankruptcy and is controlled by its creditors.

To win the trademark, Apple has to bear the burden of proof and establish to the mainland china court that the contractual party has led apple to believe that it has the apparent authority to sell the trademark. But Since who owns a trademark is public information and anyone with Internet access can get that info within a few mins from China's trademark office website. It is exeedingly difficult for apple to prove that the entity who sold the trademark led Apple believe it has the authority. Even if Apple wasn't actually aware of this, court may hold that apple shall be responsible for its negligence.

Further, even if Apple did manage to establish the "apparent authority" argument and is supported by the court, and the court found the agreement on trademark transfer binding on the actual owner, Proview Shenzhen. Apple faces another huge obstacle:

Since Proview is on the brink of bankruptcy. Apple's claim against Proview would be as useless as any ordinary creditor. Yes, Proview may owe Apple a trademark, but it also owes other creditors millions of dollars. When the trademark is Proview's only asset, there is no legal basis to liquidate the company by satisfying only one creditor, Apple. If the creditors and Apple can't reach an agreement, the trademark will have to be sold through public auction and then every creditor and apple get a slice. Alternatevely, apple has to offer to other creditors big sums of money in exchange for the trademark.

I simply do not think any of the above legal framework is exclusive to China. Should this happen in any western jurisdiction, Apple may still have a huge proble. Apple's legal team is the one to blame for its total ignorance and stupidity when they enter into that contract.

Yes. Proview Schenzen, the current owner of the Chinese trademark, is a subsidiary of a Hong Kong Company.

Proview Taiwan was the seller. Proview Taiwan certainly seems to be in breach of its warranties and representations. Proview Taiwan is on the hook for their misrepresentations. From everything I have heard, however, they may be judgement proof.

The creditors can be sued for their own actions. However, they cannot be liable if their borrower is a bad guy.

Likewise, Proview Schenzen is not liable for fraud perpetrated by an affiliate.

I think that what may have seemed a clear-cut, legal purchase when everyone was happy may not be so clear-cut when microscopically examined from a legal standpoint retrospectively.

Many things in life work this way. As a loose analogy, you can be late to work often if the boss overlooks it because of your otherwise stellar performance. But if a new boss is hired and begins looking carefully through your timesheets, you of course are technically are in violation of policy and could get in trouble retrospectively IF the new boss needs a reason to dislike/fire you.

Most people would of course assume that "legal" matters like the buying and selling of a trademark, would be much more black and white. I work in medicine, and find that people who are not in the field also often falsely assume that medical treatments, opinions, or answers are either right or wrong or correct or incorrect. Often, that's just not the case.

Usually, it is, because the buyer deals with the owner.

Here, the buyer dealt with a company that did not own the trademark in China.

Why this happened is likely important. Apple is screaming fraud, which may be true.

But in general, when there is a public registry of ownership (such as the Registry of Deed for real estate), the buyer is expected to check things out, and the registered owner need not fear that some third party can sell his property.

Why Apple took the word of Proview Taiwan and did not heed the registry is not currently known.

If trademark ownership is so easy to determine, why would you assume that the legal team of a multi billion dollar corporation would make such a glaringly simple mistake? Of course, it is _possible_, but I think extremely unlikely.


That doesn't make sense. If Apple wins the case or settles, Proview doesn't "owe" Apple a trademark - judgement in Apple's favor would mean that Apple has owned the trademark all along. Proview's creditors would have no lein at all in such a scenario.

My guess is that Apple's legal team was not involved.

Apple used a third-party shill to buy the mark. My guess is that Apple had no direct contact, and that the third party hired its own lawyers. My guess is that nobody involved had any idea that Apple was behind the curtain. If they knew, they could slip up and reveal the secret. If they didn't know, that would not be a risk.

My guess is that this was treated by all concerned as a small transaction between nothing companies. Also keep in mind that somebody on the buyer's end should have checked the registry to be sure that the Chinese mark was properly transferred. The media claims that the omission was not discovered until years later, indicating that the standard post-transaction due diligence was also omitted.

That is the only explanation I can think of as to why this was handled so sloppily.

Apple is torn on this; they can easily afford to buy Proview out, but to give in would lead to more such cons.
So Apple has to defend, with an attack on these pirates.

http://www.theregister.co.uk/2012/02...ew_defamation/
Proview wins new Chinese IPAD ruling as Apple threatens to sue
Tech titan wants monitor minnow to zip it
By Phil Muncaster
Posted in Small Biz, 21st February 2012 10:02 GMT

http://www.theregister.co.uk/2012/02...udge_decision/
Exploitative' Proview slammed by trademark judge ... in 2010
Court said monitor biz deliberately tried to injure Apple
By Phil Muncaster
Posted in Law, 17th February 2012 12:26 GMT

That's not true. Even if the court held that the contract is binding. Apple doesn't own the trademark all along. A binding contract only means you have a contractural right to claim the trademark. Before the actual transfer happen (have your name printed on the trademark certificate), the owner is still Proview Shenzhen. It's like u entered in to an agreement with a property developer to buy an aparement. If the developer default and went into bankruptcy before he transfers u the title of the property, you may not be able to actually get your apartment and all you can do is to split the remaining assets and share a slice like every other buyer(creditor)

in one of the emails between proview shenzhen and london IP company, huy yuan and ray mai were mentioned that they were located in shenzhen, but trade mark belongs to proview taiwan.

if proview shenzhen now claimed that trade mark is proview shenzhen property, did not they commit a perjury? at least they lied about it when they talked to that apple's shill company.

i understand that maybe proview shenzhen is separated entity from that in hongkong or taiwan, though financially they might be one. but their lawyer, ray mai, has been involved in talks with apple's shill company and huy yuan specifically referred proview taiwan for proper transferring trade mark. i think proview shenzhen themselves did not know that IPAD trade mark is their property until they knew the buyer is apple. so i doubt proview shenzhen even has its own lawyer in china until the case is blowed up.

but one thing is clear, proview taiwan is the owner of proview shenzhen. though the law might be different in different place, proview cheated apple's shill company by misquoting its shenzhen's branch china's property as their own. therefore, apple can sue them.

No, that is incorrect. Proview Taiwan is not the owner of Proview Shenzhen. Instead, as I've seen it described, both are subsidiaries of Proview Holdings in Hong Kong.

Now do you understand the problem Apple is having?

I dont know what documents you saw but the ones that I read were all dealing with Proview Shenzhen representative, and apple was directed by Proview Shenzhen to purchase the iPad trademark in Taiwan at there subsidiary.

To quote one of those documents " Yes, Mr. Ray Mai and I are located in Shenzhen But the trademark is not belong to Shenzhen company but Taiwan company. That the reason why we choose the meeting location in Taiwan."

The documents include a schedual A showing the countries that the trademarks are being transfered and sold in from the shenzhen representatives includes "China" proper as well.
Apple was dealing with the shenzhen office of proview and was directed to meet at the Proview Taiwan office to purchase and conclude the deal with representatives of the shenzhen office.

The documents are clearly in Apples favor. This debacle clearly wreaks of disshonesty on the owner of proviews part and is nothing but extortion.

Lol it even goes on to say that the agreement is exclusively governed by the laws of Hong Kong and the Hong Kong courts have exclusive jurisdiction over the agreement for all the countries listed in schedual A which include "China" Proper.

The Hong Kong courts have allready ruled that apple has the rites to the trademark.
As I said the owner of proview is a criminal and should be treated as such.

"Lobbying" in China involves the greasing of many palms... even more so than in Washington D.C., if you can believe that!

In Addition, "face" is very important in China, so Apple can allow Proview to save face with pocket change, and everyone goes there way. Apple bought worldwide rights for about $15,000, even doubling that is lunch money.

Suing a nearly bankrupt company for money has all the satisfaction potential as kissing your sister.

The emails you refer to are indeed in Apple's favor.

The legal documents however, are as I described them to be. The legal documents are what i was referring to, not the extraneous stuff.

And yes, I agree with you that Proview was sleazy about the whole thing.

As my friend living in Asia for 8 years has said, saving face is paramount. So, I definitely believe Apple should work to settle the suit. It's one way to win big points with the locals.

And notice how Proview worded their willingness to negotiate with "peaceful intentions." That's my understanding on how it's done there.

My brother-in-law (who owns a small publishing company) lost a few of his products and the name of his company to a Chinese firm that got upset because he didn't want to sell the business to them! He's working it out but still, the Chinese culture and the Chinese legal system is very different, obviously. It doesn't seem fair to me -- but only when I "think like a Westerner" (inside of English Common Law/Roman Law)...

Given this - I think that Apple should do something moderate to settle the suit.

No they don't. They know better.

[QUOTE=H2P;2052
And notice how Proview worded their willingness to negotiate with "peaceful intentions." That's my understanding on how it's done there.
.[/QUOTE]

hmmm, "peaceful" =? alternative is=? If Apple won the game of chicken, I would like to call the ipad, l-pad (legal pad, le-pad in french, ;-). Apple can give me $514 (1 share) for the name ;-).

Proview is the new Kodak, when you are on your way down, drag everyone else with you. It is the new world order in tech business!

Ha! Without incurring any wrath? I don't for a minute believe Apple would do anything so rash as pick up and move all production out of China. But Google did withdraw from China. If Apple took a hike (if it were even feasible), it seems like the fallout would be enormous. Frankly, the Apple shareholder lawsuits would be filed immediately and the arm twisting by politicians and trade officials would be extreme. It is already a very big deal that some production is on its way to Brazil.

But in the end this is just petty banditry. The stakes are too high given the growth rate of iPad adoption. It is far too important for Apple to meet the demand they have created rather than leave an opportunity to their imitators.

On the other hand I do hope Apple exhausts all their legal options giving Chinese officials a chance to act better than the corrupt image they have been gaining. The results of this farce can be used to determine how aggressively Apple pursues the transfer of manufacturing to Brazil and elsewhere.

Hell Apple should probably just buy them, kill two birds with one stone. All this lawsuit stuff goes away and you get all of there intellectual property to boot. I doubt they have much to offer as a company at this point so you could probably get them for a dime.