(Reuters) -- Proview Technology, which is battling Apple over the iPad trademark in China, has asked Chinese distributors to stop selling the popular tablet PC after the U.S. technology giant launched the latest version of its iPad.

The move is the latest twist in a long-running lawsuit between the world's most valuable technology company and the Chinese firm, a unit of near-bankrupt Proview International Holdings Ltd, but was expected to have little impact on the case.

Proview Technology (Shenzhen), in an open letter to China's suppliers and resellers, urged them to immediately stop selling, storing and shipping the iPad as of Thursday, citing trademark infringement issues.

Anybody who continues to do so will be seen as intentionally infringing rights and the company will adopt the most severe measures by taking legal action, Proview Technology said in the letter to iPad suppliers and resellers in China.

The dispute has dented sales of the iPad in China, Apple's second largest market by revenue, and the two sides are now awaiting a key ruling by the high court in Guangzhou after a lower court ruled in favor of the Chinese firm last year.

This is Proview's strategy to give Apple more pressure in the Chinese market, to try and add another blow to its iPad sales there, said Rachel He, a lawyer with the firm Guangdong Sun-Kindle.

However, I don't think it will affect the decision of the Guangzhou high court because that ruling will be based more on the new evidence presented last week, she said.

The Higher People's Court in Guangzhou heard Apple's appeal on February 29 and is expected to make a decision in coming weeks or months.

Proview released its latest statement after Apple on Wednesday released a faster 4G version of its iPad, offering a better screen and other new features.

Chinese media have reported that Proview is seeking up to 10 billion yuan ($1.6 billion) in compensation for trade mark infringement.

Proview has said it favors an out-of-court settlement, which usually involves the payment of compensation, which analysts have said the company needs to repay its creditors.

Hejun Vanguard Group, a consulting company representing Proview creditors, said in a statement late on Wednesday that the iPad trademark in China belonged to them.

Proview's main creditors are Bank of China Ltd, China Minsheng Banking Corp Ltd, China Development Bank, China Guangfa Bank, Bank of Communications Co Ltd, Shanghai Pudong Development Bank Co Ltd, Hua Xia Bank Co Ltd and Shenzhen Pingan Bank.

(Reporting by Lee Chyen Yee and Donny Kwok; Richard Pullin)

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