iPad 3 Release March 7: Can Proview Dispute Stop Tech Juggernaut from Launching New Tablet?

Apple has its feet firmly on the ground though Proview is trying to drag the tech giant into the quicksand with the iPad trademark dispute which is brewing in China, and now in the U.S. The Cupertino-based company announced Tuesday that it will hold a special event on March 7 at Yerba Buena Center for the Art in San Francisco. The media invite for the event, which will kick off at 1pm ET, read, “We have something you really have to see. And touch.” The invite shows the bottom of a device, which can easily be recognized as the iPad. Can the Proview trademark dispute derail Apple's plans of launching iPad 3 as scheduled?

For the past few weeks, it seemed Proview could pose a serious threat to the release of iPad 3. Proview wants Apple to stop using the iPad trademark in mainland China. However, it received a blow last week when a Shanghai court refused to stop Apple from selling the iPad. Though disappointed, Proview is now looking forward to banning iPad sale in the U.S. and on Monday, it amended a lawsuit it had filed earlier this month in Santa Clara, California’s Superior Court.

The trademark dispute is centered on the 2009 deal between Proview and IP Application Development Ltd (IPAD), reportedly a front company for Apple. IPAD purchased the iPad trademark from Proview at a cost of around $55,000. After the deal, Apple released iPad in 2010 and almost immediately the tablet became a “revolutionary” product. Incidentally, Proview in 2000 had released a not-so-famous electronic device named IPAD (Internet Personal Access Device). The device also appeared on Cnet in August 2000. Now Proview is accusing Apple of alleged fraud and unfair competition. The company wants to have the 2009 trademark deal ruled void.

“While some technology companies create special purpose vehicles in order to obtain trademarks, in this case the sole function of Apple’s special purpose vehicle was intentional misrepresentation, and an effort to fraudulently induce Proview Taiwan into a sale of the IPAD trademarks,” Proview said in a statement.

“Among the many allegations in the U.S complaint are fraud by intentional misrepresentation, fraud by concealment, fraudulent inducement, and unfair competition,” the company said.

The company has accused Apple of playing a game of chess through IPAD. The only purpose of IPAD was to acquire iPad trademark name rights from Proview, on Apple’s behalf. However, at the time of entering the deal, IPAD told Proview that it wanted the trademark because it was an abbreviation of its name.

“While some technology companies create special purpose vehicles in order to obtain trademarks, in this case the sole function of Apple’s special purpose vehicle was intentional misrepresentation, and an effort to fraudulently induce Proview Taiwan into a sale of the IPAD trademarks.

“Proview Taiwan had concerns about the purchaser’s intentions, and was very diligent in trying to understand the facts surrounding its interest in Proview Taiwan’s IPAD trademarks. But even careful diligence is ineffective when the counterparty is engaging in intentional fraud.

“Apple obtained the iPad trademark by defrauding Proview Taiwan through tactics that involved explicit misrepresentations, and the use of foreign entities specifically created to perpetrate the fraud. By filing the complaint in the California Superior Court, Proview Taiwan seeks the truth about who at Apple orchestrated the fraud, and the specifics of how it was implemented. Proview Taiwan believes that when the truth is exposed, the full weight of Apple’s fraudulent and nefarious behavior will be revealed and the appropriate remedies will be obtained,” ,” Proview spokesman Cal Kenney said in a press release.

On Monday, Proview said it had amended its U.S. lawsuit and apart from having the trademark deal declared void, it also is seeking unspecified compensation, a share of Apple’s profits from the alleged “unfair competition” and an order to stop Apple from using the trademark.

If the 2009 deal is voided for fraud, iPad trademarks for the European Union, South Korea, Mexico, Singapore, Indonesia, Thailand, and Vietnam would revert back to Proview Taiwan.

The legal pundits are divided over who will win the lawsuit in the U.S. If Proview wins, then Apple may have to accept Proview’s demand of $1.6 billion to purchase iPad trademark, as all the names ranging from (a)Pad to (z)Pad are booked. Alternately, Apple could enter into an out-of-court settlement with Proview to get the trademark rights.

Apple is famous for its revolutionary products and Proview is a little-known company. But Proview is not willing to give up without a fight. The legal battle can end up in few days or it can last for a few weeks or even a few months. However, despite this puzzling situation, Apple has gone ahead in sending out invites to the media for a special event on March 7.

(Reported by Johnny Wills, Edited by Surojit Chatterjee)

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