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Trademark dispute could block sales of new iPad

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The new iPad was launched in San Francisco, California on March 7, 2012. [Xinhua]

If a trademark dispute between Apple Inc and a Shenzhen-based company does not reach a conclusion soon, Chinese shoppers may not be able to buy the next version of the technology giant's iPad tablet on the mainland.

At a news conference that Apple called for Wednesday morning in the United States, it is widely believed that the company will introduce the third version of its popular iPad. Proview Technology Shenzhen Co Ltd, which says it owns the rights to the iPad trademark on the mainland, has called on Chinese customs authorities to prohibit exports and imports of the device.

Since February, Proview Shenzhen has filed complaints to various customs authorities alleging that Apple has violated its trademark. The company has also asked for an embargo on imports and exports of the iPad, said Xie Xianghui, a lawyer representing the company.

"We are fully prepared," Xie said. "This petition is specifically targeted at the iPad 3."

He said customs authorities have given the company no formal replies so far. He said he has sought to have Proview Shenzhen's request accepted sooner.

Feathers have flown since US media began reporting that Apple plans to not let the trademark dispute in China derail its schedule for releasing products and that the new iPad is due to be introduced in early March.

The rumor mill has picked up pace, churning out speculation that the device will have faster internal components, a higher-resolution screen and settings enabling the device to connect to fourth-generation networks, which are still being established in many parts of the world.

While the new iPad has yet to make its debut, the trademark dispute in China has cast a shadow over the product's sales prospects in the country, which is the fastest-growing market for Apple.

Proview Shenzhen registered its iPad trademark in China in 2001, according to the official website of China's trademark authority. That was nine years before Apple introduced its iPad series of products.

From the beginning of 2012, the Shenzhen company, which is on the verge of bankruptcy, has accused Apple of trademark infringement and demanded that Apple cease selling and marketing iPads in China.

No final verdict has come out yet in the case, and opinions are split over whether Apple has violated Proview Shenzhen's rights or whether Proview Shenzhen, a company that has never produced iPad products, is making dishonest demands for compensation.

But many Chinese online stores, including Amazon.cn and Gome, ceased selling the iPad after administrations of industry and commerce in various cities seized many of the tablet computers.

Experts said Apple should modify its branding practices to avoid similar lawsuits. At least 39 Chinese companies and individuals in recent years have attempted to register trademarks for the iPad and iPhone in instances when Apple does not have the rights to them, according to the China Trademark Website.

Experts say the chances are slim that Proview Shenzhen will be able to block the import and export of iPads and that it is unlikely the company will be able to meet all the requirements for filing a successful petition.

Wang Jun, an expert on trademark law at Fudan University in Shanghai, said customs authorities will start acting on Proview's request when the firm agrees to set aside a provision to cover the value of the goods it wishes to have banned from import or export.

"That won't be easy for this debt-strapped company," Wang said. "If Proview Shenzhen cannot provide the sum in time, customs authorities will not ban iPads."

He also said that customs authorities will not carry out the requested investigations until the new version of iPads reaches duty-free zones.

Even if all conditions are met, "the authorities will be quite cautious in handling this case", Wang said.

"They are likely to ask for help from the State Intellectual Property Office to identify if an infringement has occurred."

In the third quarter of 2011, Apple sold 72 percent of the tablet PCs that were sold in China. The same period saw the sale of 1.57 million of the products, according to the information-technology consultancy Analysys International.