Apple Pays Proview to Settle China Ipad Trademark Suit

Apple has paid $60 million to settle Proview’s trademark suit against it for the right to use the iPad name in China, according to a statement Monday from the Higher People’s Court in Guangdong province.

“The Ipad dispute resolution is ended,” said the court statement. “Apple has transferred US$60 million to the account of the Guangdong High Court as requested in the mediation letter.”

In August of 2009 Apple had already paid $50,000 to Proview, a struggling Taiwan-based display maker that had registered the name in a number of markets in hopes of ultimately introducing a touch-sensitive computer. To disguise its identity Apple had made the purchase through a Britain-based shell company.

However, when Apple launched iPad in 2011 and sought to market it in China, the Shenzhen branch of Proview — by then struggling to stay out of bankruptcy — filed suit for trademark infringement, claiming that it and not the Taiwan-based Proview owned the trademark to the name in China. The Shenzhen court agreed with Proview in its ruling last December and issued an injunction against the sale of iPads in China.

Apple appealed in February but the appeal was not given a high probability of successful by most legal analysts. Before issuing a ruling the appellate court pressured both sides to enter into settlement negotiations.

The settlement is far less than the $400 million Shenzhen Proview had sought in its initial settlement demands. It owes creditors over $200 million according to statements by its chairman Rowell Yang, and may end up having to file bankruptcy even after disbursement of the settlement funds. Proview had accepted the $60 million due to mounting pressure from its debts and uncertainty as to how much the court would award it even if it prevailed on appeal.

For Apple the settlement amounts to less than the $86.6 million in average daily China sales during the second quarter of 2012 — and that’s without the iPad.

Proview is currently proceeding with efforts to enter the LED lighting market. It also hopes to move into the field of energy investment and management, according to Yang. Late last month Proview had fended off an effort at pushing it into liquidiation by Fubon Insurance to which it owes $8.67 mil.