Chinese officials raid retailers, confiscate iPads following trademark ruling against Apple

iPad2 Seized in China

In the latest development surrounding Proview Technology’s trademark infringement case against Apple over the “iPad” name, a Shanghai court has ruled against Apple. Following the decision, The Xinhua District’s Administration for Industry & Commerce began a crack down on the iPad 2 in Taihe Electronics City, a Shijiazhuang-based marketplace for electronics.

After receiving a letter from Proview, senior Shenzhen officials gave the green light for the raid, forcing retailers at the electronics market to hide their stock of iPads at the risk of confiscation. Despite the raid, customers were said to be able to purchase the iPads over-the-counter by directly asking retailers, which were desperate to rid of their stock. Official Apple stores were said to be unaffected by the raids.

“Mr. Zhang, who is in charge of the Apple counter at Taihe Electronics City, told reporters that if anyone wants to buy the iPad 2, he would have to retrieve it from the stockroom. There aren’t any samples of the tablet on the counter because if found by the authorities, the business will be seized,” the Hebei Youth Daily reported. 

Apple iPad 2 confiscated in China

The sting netted 45 of Apple’s second-generation iPads, and the offending stores will be slapped with a fine.

Proview trademark document 2001

According to Beijing-based IP lawyer and law professor, Stan Abrams, the Administration for Industry & Commerce has the authority to, “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.”

Proview Technology, the Shenzhen subsidiary of Taiwanese Proview International Holdings, has been mired in debt recently. Shares of its stock were suspended from trading in Hong Kong on August 2, 2010, and the company failed its own attempt to launch a tablet.

After another Shenzen court dismissed an Apple lawsuit laying claim to the iPad name in November, Proview returned fire with its own legal barrage. Proview Technology filed official complaints with 20 Chinese cities to in an effort to halt the sales of iPads throughout China and collect fines from Apple. Independent Apple-sanctioned retailers in Shenzhen, Huizhou, and Shanghai have all been caught in the web of Proview’s lawsuits. On Jan. 5, Apple appealed the decision against it, and is currently pending an outcome. 

While the recent raid has been limited to the city of Shijiazhuang, Apple’s retailers throughout other cities are on high alert at the risk of further raids. “You’ll likely see more and more actions across the country,” Xie Xianghui, a lawyer for Proview Technology, informed the LA Times.