Apple Inc risks losing the right to use the iPad trademark in China, a senior official says, as a Chinese court is seeking to mediate a settlement between the technology giant and a local company challenging its use of the iPad name.
Yan Xiaohong, deputy director of the National Copyright Administration, told reporters in Beijing the government regards Shenzhen Proview Technology as the rightful owner of the trademark for the popular tablet computers. His remarks could add to pressure on Apple to find a solution to the stand-off.
Mr Yan's comments followed news that the Guangdong High Court in southern China is seeking to arrange a settlement in the case. In late February, the court began hearing Apple's appeal of a lower court ruling that favoured Proview in the trademark dispute.
"The dispute between Apple and Shenzhen Proview concerning the iPad trademark is going through the judicial process," Mr Yan said in a news conference carried on the internet.
But he added that "according to our government's laws, Shenzhen Proview is still the lawful representative and user of the trademark".
China has sought to showcase its determination to protect trademarks and other intellectual property, but with hundreds of thousands employed in the assembly of Apple's iPhones and iPads is unlikely to want to disrupt the company's production and marketing in China.
Ma Dongxiao, a lawyer for Proview said the company had expected all along to settle with Apple, with the key sticking point being the amount of money involved.
"It is likely that we will settle out of court. The Guangdong High Court is helping to arrange it and the court also expects to do so," Mr Ma said.
Court officials contacted by phone said they were not authorised to comment on the issue to foreign media.
"Given the wide implications of this case we need to wait to see the final ruling of the court, which will decide the ownership rights for the trademark," Mr Yan said. "We will proceed with the case in a prudent manner."
He said commercial authorities that had received complaints about Apple's use of the iPad trademark were collecting evidence.
"Once the ruling emerges we will handle the case according to the evidence we have," he said.
Chinese courts often try to mediate agreements out of court. But it is unclear whether Apple is open to that option.
Proview, a financially troubled maker of computer displays and LED lights, says it registered the iPad trademark more than a decade ago. Apple says Proview sold it worldwide rights to the iPad trademark in 2009, though the registration was never transferred for China.
Proview's other worldwide trademarks for the iPad name were owned by another subsidiary of the Proview Group, Taiwan-based Proview Electronics. But the mainland China trademark was registered by Shenzhen Proview.
An Apple spokeswoman, Carolyn Wu, said the company had no new comment on the possibility of a settlement with Proview.
In a statement, Apple reiterated its earlier insistence that it would never "knowingly abuse someone else's trademarks".
The statement adds that Proview "still owe a lot of people a lot of money, they are now unfairly trying to get more from Apple for a trademark we already paid for".