By Herman Lai, posted Feb 13, 2012 at 2:37 AM, 2,733 views,

Chinese Authorities Starts to Pull iPads From Shelves in China (UPDATED)

Apple fans in China, we have a very bad news this morning. Some reports emerged from the China today are suggesting that Chinese authorities are starting to pull Apple iPads from retail stores in the country, as the iPad trademark in China does not belong to Apple.

UPDATE: Apple may be fined up to 30 billion Chinese yuan (4.8 billion U.S. dollars), and rename their iPad in China if they loses the appeal to get the iPad trademark.

Apple lost a trademark patent case against the Chinese monitor biz Proview for the term “iPad” last year December, which it is currently appealing. The Chinese authorities, however, have apparently been notified of the lawsuit outcome on February 9, and asked to step in against retailers selling the iPad 2. Here’s a statement from Beijing-based IP and IT lawyer Stan Abrams,

Proview has apparently filed an enforcement application with the Beijing Administration of Industry and Commerce (AIC) [and has] a pending appeal to the High Court on a Shenzhen contract-based lawsuit that Proview won at the lower level, and a trademark infringement case that Proview filed in Shanghai.

Since Proview is the legal owner of the iPad trademark in China and, as far as we know, Apple has no good evidence that Proview filed the trademark in bad faith over a decade ago, it certainly looks good for Proview in both cases, particularly the one in Shanghai.

Local AICs [being federal agencies] have the authority to handle intellectual property infringement cases that involve trademark and unfair competition. In the case of the iPad dispute, we are dealing with trademark infringement.

What can the AIC do? It can raid premises, seize documents, equipment, products and counterfeit marks, and it can halt activity and lock down businesses. Once AIC makes a decision about infringement, it can order fines (these go to the government, not the trademark owner), revoke business licenses, and mandate a public apology.

So, the AIC have begun taken steps related to the trademark issue, and confiscating iPads discovered in retailers’ shops. According to Hebei Youth Daily (Chinese), local representatives of China’s Administrations of Industry and Commerce (AIC) launched a campaign to crack down the sale of the iPads on Feb 9 after receiving Proview Technology’s complaint, and they have confiscated 45 iPad 2 units from shelves in many retail shops and electronic stores in Shijiazhuang city, capital of North China’s Hebei province.

Meanwhile, the iPads in the Apple retail stores located in Beijing and Shanghai are not seized yet, and sales are still available on Apple’s online store in China. As far as we know, Apple is appealing the decision. The ban still hasn’t officially announced by Apple yet, but many Chinese netizens are already discussing the ban on Sina Microblog (China’s Twitter-like service).

Retailers Are Now Selling iPads Behind The Counter

According to Chinese media Sina, some retailers in Hebei have been spooked by the raid, and they have removed the iPads to back storerooms, fearing that the local authorities will confiscate them. No iPads will be displayed, and for those Chinese shoppers who are still looking for the iPad can get one if they ask.

The Worst Case

Sources said that Proview is ready to provide materials to the Chinese customs, which would ban the import and export of the Apple’s iPad and iPad 2. Moreover, a lawyer representing Proview said there are already nearly 20 AIC departments from cities such as Shanghai, Shenzhen, Jiangsu and Xuzhou are involved in the removal of iPads from sale over trademark issues, and there will be more AIC involved. By all means, a lot more iPads will be confiscated by the authorities! Here’s the worst case Apple may face — loses the appeal that the company filed in the Higher People’s Court of Guangdong, faces a large fine of up to 30 billion Chinese yuan (4.8 billion U.S. dollars), and renaming the iPad in China.

Source: Hebei Youth Daily (Chinese), Sina Tech, Offbeat China

The Saga