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.
If I were Apple, there's no way I'd go for a settlement here. The company is already bankrupt, how much longer could they possibly pay court fees? It's starting to look like this whole thing was a sham to possibly get some settlement money from Apple just to make the problem go away.
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.
Soon as Apple realized that the name iPad was being used in China, it should have known to pick another name instead of an uphill battle.
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.
"This is where we show Apple just how many corrupt judges are in our pocket, expecting a piece of the final shakedown price. This is where we show these foreigners what 'rule of law' means in mainland China."
I hope very much that your translation turns out to be more accurate than mine.
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"?
That "one guy" is not the sole owner of all the assets. Likely he never was.
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.
No. The contract of sale was entered into with the Taiwan subsidiary, who never owned the rights in China.
The documents are AGAINST Apple.
They have extraneous documents from which one could infer fraud or mistake. The extraneous documents may be enough to get Apple an equitable decision.
But the main document, the one that transfers ownership, is NOT in Apple's favor. It was never signed by the owner of the Chinese trademark.
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.
Oh Lordy! Just change the name over there! Macpad, Macbook Slim. Who cares, just do something, anything but settle.
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.
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.
Maybe he was, maybe he wasn't. But he claimed to be and entered into a sale of those assets.
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.
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.
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.
Proview Taiwan is NOT using its subsidiary to say otherwise. The owner of the mark is an affilliate, not a subsidiary.
It is like your brother selling me your car. He cannot effectively pass title, because he has no right to your car.
Apple claims that the father was involved, and made the decision for both sons. They have some emails that tend to support that. But the situation is far from clear.
Both Proview companies are evidently controlled by the same person.
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 hasn?t 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 wouldn?t 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 doesn?t take much to change the laser etching on an iPad to change the name just for China.
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.
Proview is not a going concern. Their creditors want to maximize value, and can do so without incurring any wrath.
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.
Sorry, but I've already got a lock on copywriting the best replacement name:
One day before deliberations are scheduled to begin over contested 'iPad' trademark rights in Shanghai, Chinese company Proview has said that it is preparing for out of court talks with Apple which could result in a settlement and bring an end to the prolonged dispute
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 Proview?s 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.
This was Proview's intention all along. Raise enough questions, get enough insiders to help, make it "China vs Apple" so it can get as much money from Apple as possible.
Ho boy! Pay day is just around the corner! I can smell the settlement money. Rolex watches and Mercedes Benzes for every one!
Proview is not a going concern. Their creditors want to maximize value, and can do so without incurring any wrath.
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:
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.
Comments
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.
If I were Apple, there's no way I'd go for a settlement here. The company is already bankrupt, how much longer could they possibly pay court fees? It's starting to look like this whole thing was a sham to possibly get some settlement money from Apple just to make the problem go away.
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.
Soon as Apple realized that the name iPad was being used in China, it should have known to pick another name instead of an uphill battle.
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.
Or translation:
"This is where we show Apple just how many corrupt judges are in our pocket, expecting a piece of the final shakedown price. This is where we show these foreigners what 'rule of law' means in mainland China."
I hope very much that your translation turns out to be more accurate than mine.
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"?
That "one guy" is not the sole owner of all the assets. Likely he never was.
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.
No. The contract of sale was entered into with the Taiwan subsidiary, who never owned the rights in China.
The documents are AGAINST Apple.
They have extraneous documents from which one could infer fraud or mistake. The extraneous documents may be enough to get Apple an equitable decision.
But the main document, the one that transfers ownership, is NOT in Apple's favor. It was never signed by the owner of the Chinese trademark.
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.
Oh Lordy! Just change the name over there! Macpad, Macbook Slim. Who cares, just do something, anything but settle.
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.
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.
Maybe he was, maybe he wasn't. But he claimed to be and entered into a sale of those assets.
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.
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.
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.
Proview Taiwan is NOT using its subsidiary to say otherwise. The owner of the mark is an affilliate, not a subsidiary.
It is like your brother selling me your car. He cannot effectively pass title, because he has no right to your car.
Apple claims that the father was involved, and made the decision for both sons. They have some emails that tend to support that. But the situation is far from clear.
Both Proview companies are evidently controlled by the same person.
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.
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 doesn?t take much to change the laser etching on an iPad to change the name just for China.
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.
Proview is not a going concern. Their creditors want to maximize value, and can do so without incurring any wrath.
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.
Sorry, but I've already got a lock on copywriting the best replacement name:
The "ChiPad".
One day before deliberations are scheduled to begin over contested 'iPad' trademark rights in Shanghai, Chinese company Proview has said that it is preparing for out of court talks with Apple which could result in a settlement and bring an end to the prolonged dispute
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 Proview?s 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.
This was Proview's intention all along. Raise enough questions, get enough insiders to help, make it "China vs Apple" so it can get as much money from Apple as possible.
Ho boy! Pay day is just around the corner! I can smell the settlement money. Rolex watches and Mercedes Benzes for every one!
Proview is not a going concern. Their creditors want to maximize value, and can do so without incurring any wrath.
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 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.