A Chinese firm trying to stop Apple Inc from using the iPad name in China has launched an attack on the consumer electronics giant's home turf, filing a lawsuit in California that accuses it of employing deception when it bought the trademark.
A unit of Proview International Holdings Ltd, a major computer monitor maker that fell on hard times during the global financial crisis, is already suing Apple in multiple Chinese jurisdictions and requesting that sales of iPads be suspended across the country.
Last week, Proview Electronics Co Ltd and Proview Technology Co filed a lawsuit in Santa Clara County that brings their legal dispute to Silicon Valley.
Some legal experts said there could be different outcomes from the US and Chinese cases, but a spreading of the lawsuit and delay in coming to settlement terms could hurt Apple more.
"In relation to the US, Apple is going to somewhat have a homeground advantage," said Elliot Papageorgiou, a Shanghai-based partner and executive at law firm Rouse Legal (China).
At stake for Apple is its sales and shipments in China, where its CEO Tim Cook said it was merely scratching the surface. Debt-laden Proview International, meanwhile, needs to come up with a viable rescue plan before mid-2012 or else it faces delisting from the Hong Kong stock exchange.
"Given the current timeline, Apple would have the greater impetus to come to settlement simply because the ability to disrupt shipments is more immediate than the pressure faced by Proview and its potential delisting," said Papageorgiou.
Proview accuses Apple of creating a special purpose entity -- IP Application Development Ltd, or IPAD -- to buy the iPad name from it, concealing Apple's role in the matter.
In its filing, Proview alleged lawyers for IPAD repeatedly said it would not be competing with the Chinese firm, and refused to say why they needed the trademark.
Those representations were made "with the intent to defraud and induce the plaintiffs to enter into the agreement", Proview said in the filing dated February 17, requesting an unspecified amount of damages.
Apple on Friday reiterated its statement saying that it had bought Proview's worldwide rights to the iPad trademark in 10 different countries several years ago. It also said that Proview had refused to honour their agreement and a Hong Kong court had sided with the US technology giant in the matter.
"Our case is still pending in mainland China," Apple said.
