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Chinese Officials Can Gloat Over Apple's IPad Woes


Chinese Officials Can Gloat Over Apple's IPad Woes

Photograph by ChinaFotoPress/Getty Images

Chinese officials might just be enjoying Apple’s current legal woes. Apple (AAPL) is fighting for the rights to the iPad name in the country, squaring off against a local maker of computer displays that claims ownership of the iPad trademark. The Shenzhen-based company, Proview International Holdings, won the most recent court battle in December. This week, Proview said it had asked Chinese customs officials to stop Apple from importing iPads and from exporting them from Chinese factories. Apple is appealing, but in the meantime some retailers have stopped selling the tablet.

It’s an embarrassing moment for Apple, which says it acquired Proview’s rights to the iPad trademark in 10 countries, including China. Proview says the deal did not include China. As the two fight it out, this is a time to gloat for the Chinese leadership, which is accustomed to being lectured by U.S. and other foreign officials about the country’s woeful record in allowing theft of trademarks and other intellectual property rights, or IPR.

Just this week, China’s vice president, Xi Jinping, who is likely to become the country’s next top leader, got an earful about IPR while visiting the United States. Speaker of the House John Boehner (R-Ohio), for instance, met with Xi and, according to Boehner’s website, “cited deficiencies in China’s enforcement of intellectual property laws as an ongoing barrier to stronger economic ties.”

A Lecture for Washington

Sure enough, the official China Daily newspaper has jumped on the opportunity to say “we told you so” to the rest of the world. Apple has to follow the rules just like everyone else, the paper editorialized on Feb. 16. “As the legal holder of the trademark in this country, Proview Technology certainly has the right to protect its interests. “Besides, the China Daily added, if Apple is upset about the way Proview can take advantage of that right to get authorities to prevent the sale of Apple’s iPads in China, American leaders bear some responsibility. After all, they’re the ones who have long insisted China do more to protect IPR. The rules that allow trademark owners to request seizure of counterfeits “were enacted partly in response to foreign pressure for the Chinese government to stamp out the unlicensed copying of foreign goods.”

China insists it has been making progress on cracking down on such piracy. Chinese courts considered more than 52,000 IPR cases in the first 10 months of 2011, a 42 percent increase compared with the same period a year earlier, the official Xinhua news agency reported on Dec. 20. Xinhua quoted Sun Jungong, a spokesman for the Supreme People’s Court, describing the significant increase in IPR cases in the decade since China joined the World Trade Organization in 2001. “China has made great progress in the protection of intellectual property during the past 10 years,” Xinhua quoted Sun as saying. “As the status of intellectual property has increased in national development, its judicial protection has become an indispensable part in the national development strategy.”

It’s possible that Apple might even be getting off easy in China. Because of the company’s high profile and the popularity of its products among Chinese consumers, local officials have gone out of their way to be lenient, argues attorney Dan Harris of Seattle-based law firm Harris & Moure, who writes online at Chinalawblog. “If you are not Apple, I can pretty much assure you that all of your iPads would be off the shelves in China by now and they would also not still be leaving China via export,”he writes.

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Einhorn is Asia regional editor in Bloomberg Businessweek’s Hong Kong bureau. Follow him on Twitter @BruceEinhorn.

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