Apple Pays $60 Million for Use of iPad Name in China

Apple paid $55,000 to use the iPad name in a number of countries, but a Chinese court ruled in December that China wasn’t one of them, leaving Apple to pay up $60 million this time for the right.

Apple has agreed to pay Shenzhen Proview Technology $60 million to use the iPad name in China, the Associated Press reported July 2. The matter appears to settle an ongoing lawsuit between the two companies about which one really owns the name €œiPad.€

Apple has maintained that it purchased the global rights to the iPad name in 2009, but in December, a Chinese court ruled that it hadn€™t purchased the name for use in China.

In question, said the AP report, was whether €œApple acquired the iPad name in China when it bought rights in various countries from a Proview affiliate in Taiwan for 35,000 British pounds ($55,000). The December court ruling said Proview, which registered the iPad trademark in China in 2001, was not bound by that sale, even though it was part of the same company.€

Proview, which is financially troubled and may still need to file bankruptcy, was seeking as much as $400 million, said the report. It added that Shenzhen Proview Technology is a subsidiary of Proview International Holdings, an LCD screen maker, and that both companies are under the control of a business man Yang Long-san, who €œrefused to take steps required to transfer the name under the agreement.€ A Hong Kong judge ruled that Yang had the companies acting together €œwith the common intention of injuring Apple,€ but as Hong Kong has its own legal system, the ruling was of little help to Apple.

Ultimately, the fee of $60 million was negotiated.

Apple can now begin the process of selling its third-generation iPad in China, which has become its second-largest sales market behind the United States. During the first quarter of 2012, China also became the world€™s largest market for smartphone sales. While U.S. shipments rose 5 percent year-over-year, the Asia-Pacific region saw an 81 percent growth, with China responsible for 22 percent of the quarters€™ shipments.

The iPhone trademark also didn€™t come simply€”or inexpensively€”for Apple. In January 2007 Cisco Systems sued Apple for patent infringement, saying Apple approached Cisco about acquiring the right to use the name, but when the pair couldn€™t agree, went ahead and used it anyway. Cisco acquired the name when it purchased Infogear, which had introduced a line of desktop iPhones in 2006. Cisco and Apple ultimately settled on an undisclosed amount.

The story of how Apple came to the iMac name is a much more pleasant one. As ad man Ken Segall tells in his book Insanely Simple: The Obsession that Drives Apple€™s Success, Steve Jobs developed a revolutionary, see-through, colorful desktop that he was counting on to save a then-struggling Apple. Segall and his team had helped to develop the Think Different campaign, and in the spring of 1998 they were summoned to Cupertino, Calif., for a look at what thinking differently could lead to. Jobs said he already had a great name for the machine but had called the ad team in to see if they could beat it. He wanted to call it: MacMan.

€œThe agency team was heartbroken to learn that Steve had fallen in love with such a disappointing name as €˜MacMan.€™ €¦ there could be no love for €˜MacMan.€™ Ever. It had so many things wrong with it, we didn€™t know where to start,€ wrote Segall.

Jobs gave the team a list of requirements a new name must meet, and a week later they returned to present their top five ideas; their favorite was iMac. Jobs hated it. A week later, the team returned with more ideas, keeping iMac on the list. Jobs still hated it, but slightly less than the week before. The team went home dejected. The next day, Segall learned that Jobs had been calling around, asking people what they thoughts of the name iMac. He also had it silk-screened onto a model device to see how it looked.

€œI never heard another peep about this decision,€ wrote Segal. €œSteve basically took it and ran. Obviously, he liked what he saw when he got the model back, and he must have received positive reactions from his inner circle. And so, €˜iMac it was.€

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