Apple settles China iPad trademark dispute with Proview for $60 million

Posted:
in Genius Bar edited January 2014
A Chinese court announced on Monday that Apple had reached an agreement with Proview to pay $60 million for the Chinese rights to the iPad trademark.

The Guangdong High People's Court declared an end to the dispute between the two companies after making public the news of the settlement, the Associated Press reported on Sunday.

Though Apple will have no trouble paying the $60 million, the figure is a significantly higher price tag than the $55,000 that the company claimed it paid for the trademark in 2009. For its part, Proview had argued that the Chinese trademark hadn't been included in a deal to transfer other international rights because legal representatives from its Shenzhen affiliate weren't present when the contract was signed.

Settlement negotiations began in April, according to a lawyer from Proview. In May, a Chinese newspaper suggested that Proview had turned down a $16 million settlement offer from Apple. At the time, reports suggested that officials at the company were seeking $400 million for the mark. Proview is rumored to owe as much as $400 million to its creditors, which include several prominent Chinese banks.

Proview
Derelict Proview factory with a sign roughly translated to "Do not enter."


One creditor, Fubon Insurance, has been particularly active in seeking to have the company declared bankrupt and liquidated. Proview was formerly a successful monitor maker, but it has fallen upon hard times.

With the legal dispute with Proview out of the way, Apple could be cleared to move forward with releasing its third-generation iPad in China. The new iPad first hit the market nearly three months ago. Chinese regulatory permits for Apple's latest tablet have steadily come in, but some pundits believe that the uncertainty of the Proview lawsuit has led to delays in bringing the device to the world's most populous nation.
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Comments

  • Reply 1 of 70
    Boo
  • Reply 2 of 70
    bighypebighype Posts: 148member


    Looks like pocket change to finally have a huge market open to them.

  • Reply 3 of 70
    normmnormm Posts: 548member


    This is giving in to blackmail, but it seems the Chinese courts were going to let this drag out, and a quick settlement is worth a lot to Apple.

  • Reply 4 of 70

    Quote:

    Originally Posted by bighype View Post


    Looks like pocket change to finally have a huge market open to them.



    Yeah, I feel like they just sort of gave in to get it out of the way. Apple will make the $60 million back in profit in a few months from selling the iPad in China anyway. I have no doubt that Apple could have continued to pursue, and eventually win, the case, but there's nothing to gain from fighting an already bankrupt company. 

  • Reply 5 of 70
    solipsismxsolipsismx Posts: 19,566member
    That's a huge sum for a trademark they already paid for. I doubt things would have turned out as well had this taken place outside China. I wouldn't be surprised if Proview will get liquidated shortly with that $60M going straight to their creditors.
  • Reply 6 of 70
    gtrgtr Posts: 3,231member


    That's a bargain.


     


    Apple just surrended the average yearly income of two Apple stores to get the iPad trademark.


     


    Now Proview can go get bankrupt, and Apple can move on to make just a smidge more than sixty million dollars in China in the foreseeable future.


     


    Just a smidge.

  • Reply 7 of 70


    I bet Proview had their fingers crossed as they signed the deal.

  • Reply 8 of 70

    Quote:

    Originally Posted by Santoanderson View Post


    I bet Proview had their fingers crossed as they signed the deal.



     


     


    I bet Apple did proper due diligence to be certain that they had the proper signatory this time around.

  • Reply 9 of 70

    Quote:

    Originally Posted by GTR View Post


    That's a bargain.


     


    Apple just surrended the average yearly income of two Apple stores to get the iPad trademark.


     


    Now Proview can go get bankrupt, and Apple can move on to make just a smidge more than sixty million dollars in China in the foreseeable future.


     


    Just a smidge.



     


    How much is a "smidge"?  By my reckoning, it's somewhat more than a billion US$, but less than a trillion image

  • Reply 10 of 70
    gtrgtr Posts: 3,231member

    Quote:

    Originally Posted by JerrySwitched26 View Post


     


     


    I bet Apple did proper due diligence to be certain that they had the proper signatory this time around.



     


    You mean 'due diligence' as in inadequate disclosure to investors of material information with respect to the purchase of securities?


     


    No, that probably didn't happen, seeing as this was the purchase of a trademark from a third party, and you seem to have confused it with a totally different situation entirely.


     


    Please, Conrad, tell me you don't have a drivers licence. There are an awful lot of kids out playing by the side of the road these days...

  • Reply 11 of 70
    kibitzerkibitzer Posts: 1,113member

    Quote:

    Originally Posted by NormM View Post


    This is giving in to blackmail, but it seems the Chinese courts were going to let this drag out, and a quick settlement is worth a lot to Apple.



    Their playing field, their ball, their rules. Apple threw enough meat into Proview's holding cell to encourage all of Proview's cellmates to go for the company's throat and devour it once and for all.


     


    "It's Dog eat dog, rat eat rat


    Kroc style - Boom like that."


     


    - "Boom, Like That" - Mark Knopfler
  • Reply 12 of 70
    dickprinterdickprinter Posts: 1,060member

    Quote:

    Originally Posted by SolipsismX View Post



    That's a huge sum for a trademark they already paid for. I doubt things would have turned out as well had this taken place outside China. I wouldn't be surprised if Proview will get liquidated shortly with that $60M going straight to their creditors.


    I just posted a similar comment on the USAToday site where this story appeared before AI.


     


    Any other country and this dispute would not have been so gray. If you ask me, this trademark purchase contract should've been bound by its words no matter what.

  • Reply 13 of 70
    gtrgtr Posts: 3,231member

    Quote:

    Originally Posted by delreyjones View Post


     


    How much is a "smidge"?  By my reckoning, it's somewhat more than a billion US$, but less than a trillion image



     


    About a gazillion.


     


    Or about two and a half quazmillion.


     


    Rounded up.

  • Reply 14 of 70


    It's insane. I would give up the name. Chinese government raped Apple. lol.

  • Reply 15 of 70


    So what's Proview going to do with all that money? Create crappy iPhone and iPad peripherals.

  • Reply 16 of 70
    citycity Posts: 522member


    This amounts to a China Tax that Apple should add on to the product price in China times three.

  • Reply 18 of 70


    What happened to the $1.5 billion they were asking in the Chinese court? And remember the $2 billion suit they filed in the US that got thrown out?


     


    $60 million might seem like a lot, but compared to $1.5 billion it's peanuts.

  • Reply 19 of 70
    solipsismxsolipsismx Posts: 19,566member
    Based on my calculations of using 11.8 million units sold last quarter, an ARP of $650 and a net profit of 10% it took 7 days to make $60 million in profit in just the iPad division last quarter. While that's a lot it's still a drop in the bucket for this product.
  • Reply 20 of 70
    sr2012sr2012 Posts: 896member
    normm wrote: »
    This is giving in to blackmail, but it seems the Chinese courts were going to let this drag out, and a quick settlement is worth a lot to Apple.

    It's Asia, particularly China. Some very bad things are happening in China. Unbreathable air, kids getting run over and no one helping, women getting molested on buses etc etc. "Developed" nation? China will never be one, not in the next 20 years anyway.
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