Foreign companies 'must carry out due diligence' before entering market

Apple Inc has paid $60 million in a court-mediated settlement over a trademark case that sheds light on possible legal disputes foreign companies may face as more enter the domestic market.

The money was paid to Proview Technology (Shenzhen) to end a dispute over the iPad trademark in China, the Guangdong High People's Court said on Monday.

The conclusion of the dispute with Proview is not the end of Apple's troubles as the company faces further legal challenges. [Photo/China Daily]

Apple is involved in another trademark case in Shanghai.

"The mediation letter was sent to both parties and came into effect on June 25. Apple has paid the money into the bank account designated by Guangdong High People's Court," according to a statement from the court published on Monday.

A request has been made by legal authorities to the State Administration for Industry and Commerce to transfer the iPad name from Proview Shenzhen to Apple.

Apple said it acquired the iPad name in China in 2009 when it bought rights from a Proview affiliate in Taiwan for about $55,000. But a court ruling in December found that Proview Shenzhen, which registered the iPad trademark on the mainland in 2001, was not bound by that sale, even though it was part of the same company.

Apple launched its iPad on the mainland in 2010.

Proview Shenzhen, facing bankruptcy, requested authorities in scores of cities to order shops to take all iPads off their shelves and tried to impose an embargo on new models of the iPad prior to the court case.

"We understand that Proview Shenzhen has hundreds of creditors ... any devaluation of the trademark would cause loss to the creditors," the court said.

"We listened to reasonable appeals from both parties ... and find an innovative solution for trademark disputes involving foreign entities."

Xie Xianghui, an attorney representing Proview Shenzhen, told China Daily that the ruling fell short of the original demand of $400 million.

"But we accept the mediation, as it is the best way to settle the lawsuit at the moment," Xie said.

"Both Proview and Apple Inc made huge concessions during negotiations that lasted 2-3 months."

The money will be used to pay Proview's debts, about $400 million, according to Xie. Yang Rongshan, chairman of Shenzhen Proview, also said his company accepted the mediation.

Calls to Apple and interview requests went unanswered.