Proview brings iPad trademark case against Apple in the U.S.

iPad 2

Proview Technology, the company fighting Apple over rights to the iPad trademark in mainland China, has brought its battle with the Cupertino giant to the United States, suing Apple in California for fraud and deceptive business practices. Proview is accusing Apple of acting with malice and fraud by negotiating with Proview for the iPad trademark in December 2009 via an innocuously-named subsidiary company — IP Application Development Ltd., or “IPAD” — in an effort to obscure Apple’s role in the negotiations. The suit seeks unspecified damages.

According to Proview, representatives of IPAD refused to disclose why they were interested in the trademark, only indicating that they had no intention of competing with Proview. Proview primarily manufacturers flat-screen displays.

Proview’s strategy in the United States is different from its attack on Apple in China, where it is accusing Apple of violating its trademark.

Proview is based in Guandong, China, but also operates a Taiwanese subsidiary. The Taiwanese branch registered iPad as a trademark all the way back in 2000, and sold the rights to Apple. However, Proview’s Chinese parent company claims that the Taiwanese subsidiary had no right to sell the Chinese rights to the iPad trademark.

Proview has launched several efforts in Chinese courts to have the iPad removed from the market for trademark infringement; earlier this week, the company suffered a setback when a Shanghai court rejected Proview’s efforts to get an injunction on sales of iPads in the city. However, officials in other cities (including Shijiazhuang and Huizhou) have barred iPad sales.

Apple, in turn, has claimed Proview is infringing on the iPad trademark it acquired. A Hong Kong court sided with Apple, but a mainland court in Guangdong sided with Proview, finding Apple did not have sufficient evidence for its claim it owned the iPad trademark in China. Apple’s appeal on that ruling is expected to be heard next week.

Proview’s decision to open U.S. litigation against Apple increases the stakes for both companies: it means Proview is incurring the cost and effort of trying to push an overseas case, while Apple is seeing what could have been a minor trademark dispute fester into a multinational dispute — one that could be badly timed for Apple give the attention being focused on working conditions at factories in Apple’s supply chain in China.

But the clock may be ticking for Proview: the company cases a massive debt burden, and if the firm can’t come up with a viable financial turnaround plan, it faces de-listing from the Hong Kong stock exchange by mid-year. The company has indicated it might be willing to make the dispute go away in exchange for a multi-billion-dollar settlement.