* Apple has paid $60 mln in settlement - court
* Settlement allows Apple to focus on key China market
* Ends months of legal wrangling
* Apple shares up 1.3 percent
By Melanie Lee and Samuel Shen
SHANGHAI, July 2 Apple Inc has paid $60
million to Proview Technology (Shenzhen) to end a protracted
legal dispute over the iPad trademark in China.
The lawsuit had hampered some sales and delayed the
introduction of the new iPad in China. Prior to the launch,
Proview requested authorities in scores of Chinese cities to
order resellers to take all iPads off their shelves.
The court-mediated settlement, announced on the website of
the Higher People's Court of Guangdong province, will allow
Apple to get on with selling its popular tablet PC in one of its
most important markets, analysts said.
"The settlement is great news for Apple," said Teck-Zhung
Wong, a Beijing-based analyst with technology research firm IDC.
"It just allows them to get on with business and stop being
distracted. The new iPad has been so late to the China market
that if they drag it any longer, Apple will stand to lose quite
a bit more."
China is a key growth area for Apple, and Chief Executive
Tim Cook has often said that the company has only scratched the
surface in the region.
Sales in greater China - mainland China, Hong Kong and
Taiwan - increased threefold to $7.9 billion in the second
quarter ended on March 31, accounting for about 20 percent of
Apple's $39.2 billion in revenue.
The settlement with Proview paves the way to spark iPad
sales for the September quarter, Topeka Capital Markets analyst
Brian White said.
"Apple lifted its two-iPad-per-shopper policy in Hong Kong
in what we believe may have been driven by demand from mainland
China as many Apple products make their way over to the
mainland," he said. "Today's iPad settlement is important and
opens up the sale of the new iPad."
The company and Proview, a unit of Hong Kong-listed Proview
International Holdings Ltd, have been negotiating to
reach a settlement since the court conducted an initial hearing
in February, after Apple appealed a lower court ruling against
Apple had said it bought ownership of the iPad trademark in
various countries from Proview, once a global monitor maker. But
the Chinese company said Apple dealt with only one unit of
A Chinese court ruled that Proview Technology (Shenzhen)
owned the name in China. Proview, which registered the iPad
trademark in China in 2001, tried in May to sue Apple in the
United States, but that case was thrown out.
Apple can afford the $60 million extra price tag on the
trademark, given its more than $100 billion in cash and
An Apple spokeswoman declined to comment on Monday.
Shares of Apple were up 1.3 percent at $591.59 in afternoon
The iPad dominates China's tablet PC market with more than
70 percent market share, but Lenovo Group Ltd's Lepads
and Samsung Electronics Co Ltd's Galaxy Tabs have
been gaining traction.
From the introduction of the iPad in the third quarter of
2010 to March this year, Apple shipped more than 6 million iPads
to mainland China, according to IDC.
Proview - which local media had said was seeking as much as
10 billion yuan ($1.57 billion) from Apple - and its creditors
should welcome the settlement, some lawyers said.
The $60 million will go into a court-designated account and
be used to pay Proview's creditors, said a source familiar with
the situation. In March, Taiwan's Fubon Insurance, one of
several creditors and a unit of Fubon Financial Holding Co Ltd
, applied for bankruptcy proceedings against Proview
because of $8.68 million in outstanding debt.
"The settlement fee is not bad for Proview, because although
Proview owns the trademark, it was Apple, not Proview, who
created the brand's value," said Chen Jihong, a Beijing-based
intellectual property rights lawyer at Zhong Lun Law Firm.