Apple's flagship tablet has been pulled off shelves in Shijiazhuang, Hebei Province, and "investigations are underway nationwide" over allegations that the IT giant has infringed the iPad trademark owned by a Shenzhen-based company.
"As far as I know, all stores selling authentic iPads have removed the products from their shelves. The tablet is still very popular, but now we only sell to customers who ordered from us beforehand," Zhang Shiyu, a dealer with Xianyu Digital Company in Shijiazhuang, told the Global Times.
The Hebei Youth Daily reported Saturday that officers from the Xinhua District Administration for Industry and Commerce in Shijiazhuang launched a two-day investigation Thursday and seized 45 iPad 2's from stores in the district, as well as their sales records.
The officers provided dealers with paperwork accusing Apple of infringing on the iPad brand owned by Proview Technology (Shenzhen), a subsidiary loosely affiliated with the Taipei-based Proview International Holdings Ltd, according to the report.
Local authorities declined to say whether these stores will face large fines, the newspaper said.
Proview, a maker of computer displays, registered the iPad trademark in a number of countries as early as 2000, long before Apple unveiled its groundbreaking tablet in 2010. The company's Shenzhen unit registered the trademark in the mainland in 2001, the Xinhua News Agency reported.
In 2009, the Hong Kong-listed company sold the trademark to Apple at a price of 35,000 pounds ($55,261), but it claims that the deal did not include ownership of the brand in the mainland held by its Shenzhen unit.
Apple sued Proview's Shenzhen-based subsidiary in April 2010, claiming ownership of the iPad trademark in the mainland, but the Shenzhen Intermediate People's Court rejected Apple's claims on November 17. Apple then appealed to the Higher People's Court of Guangdong Province on January 5, Bloomberg reported, citing regulatory filings from Proview.
Ma Dongxiao, a Shenzhen-based lawyer representing Proview's branch in the city, told the Global Times yesterday that more than 20 industry and commerce departments nationwide have launched investigations into the infringement case.
"What we want to achieve most is a complete end to the infringement. Proview hoped for reconciliation with Apple, but until now, I have not had any feedback from the Apple side," Ma said, without specifying where the investigations are taking place.
According to the AP, Proview's Shenzhen unit says it filed a trademark violation complaint in January with the commercial bureau of Beijing.
Apple could not be reached for comment yesterday.
Proview's shares have been suspended from trading in Hong Kong since August 2 2010, and some Internet users noted that as it is trapped in a debt crisis, Proview is trying to use the case to get out of its financial troubles.
Wu Song, a media officer at the Xicheng District Administration for Industry and Commerce in Beijing, told the Global Times that the case is still under investigation, and the administration has not made any move to pull iPads off the shelves, without revealing more details.
A salesperson with an Apple 4S flagship store in Beijing told the Global Times that the store still sells hundreds of iPads daily, and is apparently unaffected by the lawsuit.
Global Times reporters noted that the iPad 2 still occupies a prominent position on Apple's official online store, promoting the products as a perfect gift for Valentine's Day. 360buy.com, a leading e-commerce retailer in China, also provides the tablet on its website.
Apple may launch its iPad 3 in the first week of March with the lowest purchase at $579, according to the iPad's official Sina Weibo account.
You Tianyu, an information technology analyst at iResearch Consulting Group, told the Global Times that the worst scenario for the iPad 3 is being barred from entering the mainland market.
"Considering similar cases in the past, the case could be settled by Apple compensating Proview's Shenzhen unit, or by Apple acquiring the ownership of the trademark through reverse acquisition," You said.
Liu Meng and agencies contributed to this story