Apple enjoys a reputation as a savvy business operator. But in the complex, challenging context of China, it might have uncharacteristically failed to cover all its bases—or perhaps doing so is simply impossible.

Apple bought the worldwide rights to the iPad trademark from a Chinese company, Proview International, in 2009 for $55,000. Proview asserts that the agreement did not include China. Instead, a small Chinese computer display maker owns the rights to the iPad name in China. Although the company does not sell products bearing that trade name—in fact, the company is in bankruptcy—it has sued to block Apple’s right to sell iPads.

The company appears determined to get Apple to pay for its misfortune; sales have been blocked in smaller Chinese cities, with iPads even removed from retailers’ shelves. Independent Apple stores in Beijing and Shanghai were not included and continue to sell iPads. Rather, the case focuses on other retailers to which Apple distributes its products.

The case has just begun; the outcome remains uncertain. But when it comes to international trademark disputes, this case highlights the need for careful diligence. Even a company like Apple and a product as famous as the iPad could face challenges.

Discussion Questions:

1. Does Proview have the right to pull products from authorized Apple retailers

2. What other challenges do companies face when selling worldwide?

Source: David Barboza, “Apple Defends Rights to iPad Name in Shanghai Court,” The New York Times, February 22, 2012.