AppId is over the quota
AppId is over the quota
As Apple, Inc. and Shenzhen-based Proview International Holdings Ltd. battle
over the iPad trademark in China, the lawyering involved in the 2009 trademark deal between the two companies has also become a hotly debated point of contention.
Proview's lawyers have been making the case recently, both in public and in Chinese courts, that Apple's lawyers failed to perform adequate due diligence before the company paid $55,000 for the iPad trademarks held by Proview's Taiwan subsidiary. Though Apple claims the trademarks that it purchased include rights in China, Proview says they do not. So far, a court in Shenzhen?has agreed with Proview, though Apple is appealing?that decision in a?higher court in Guangzhou.
"The fact is that Apple's former lawyer made a silly mistake," Proview lawyer Xiao Caiyuan of Guangzhou's Guanghe Law Firm told The Wall Street Journal last week.
For its part, Apple says Proview is blowing smoke with such claims. In a statement last week, the Cupertino, Calif.-based company said: "Proview is misleading Chinese courts and customers with claims that the iPad trademarks cannot be transferred, or that mistakes were made in handling the transaction."
Stan Abrams, an independent Beijing IP lawyer who has posted extensively on the case at his China Hearsay legal blog, says that, based on his examination of the court records, he thinks Apple's lawyers may have failed to require proof of the mark's assignment at closing, he says. Apple spokeswoman Carolyn Wu declined to comment about the work of the lawyers who negotiated the deal with Proview.
If there was a mistake in Apple1s lawyering, it1s not clear exactly who made it.
Several sources involved in the matter say Baker & McKenzie worked on the Proview?deal and has long taken the lead on IP matters for Apple in Asia. But one lawyer who was involved in the Proview deal says that, although the firm worked on the deal, Baker did not perform the due diligence in the matter. Another lawyer, Helen Zhang, an IP partner at Zhong Lun Law Firm in Shanghai, who has been on the opposite side of deals from Apple, says that the company is known for using less expensive local firms along with Baker & McKenzie on IP matters.?
Baker & McKenzie declined to comment. Paul Schmidt, who worked on the Proview deal as a Baker & McKenzie partner but has since joined Beijing-based Jun He Law Offices, declined to comment on the matter except to say that the issues are a lot more complex than they are being portrayed in the media. Baker & McKenzie continues to advise Apple on its dispute with Proview, along with several other firms.
Benjamin Bai, a Shanghai-based IP partner at Allen & Overy, says a trademark acquisition deal like the Proview one is straightforward, yet mistakes are common. When a company buys a trademark in China, Bai points out, it must then register the assignment agreement with Chinese authorities before it is considered the mark's rightful owner.
"Many international companies make that mistake," says Bai. "They buy an IP thinking that it automatically belongs to them after acquisition, as it would in most western jurisdictions, but it doesn't--not until their registration gets approved."
Abrams says he appreciates that due diligence in multiple Asian countries is challenging. "The lawyers needed to be well versed in all jurisdictions and that's not easy, so mistakes like that are common," says Abrams. "But are you going to hire a local lawyer in every jurisdiction?"
Some might argue that1s not a bad idea. Ray Mai, now a partner at Chinese IP boutique HongWei Intellectual Property Law Office, signed the 2009 agreement on behalf of Proview. Apple has argued in court that he signed it as general counsel for the whole company, while Proview maintains he was only responsible for Taiwan legal matters. Mai claims to have forgotten many of the details of the 2009 deal, including which firm corresponded with him on Apple's behalf. But he says that a lot of the IP issues that international companies face arise because their lawyers aren't as familiar with the Chinese IP system as they are with their home markets.
"The problem with international law firms is that they are arrogant," Mai says. "They assume they know how everything works, and they refuse to admit their mistakes and shortcomings."
Schmidt acknowledges that Western law firms sometimes find themselves at a disadvantage when dealing with such a complex system. "International firms will feel removed from the game because they don't see all the dirt and the nuances with the Chinese law and practice," he explains.
Zhong Lun's Zhang says Chinese law firms tend to have closer relationships with Chinese courts and government agencies than the international firms because they are allowed to have direct contact with them. Chinese law obliges foreign law firms to appoint a local firm as an intermediary when submitting a trademark application.
But Chinese firms also have their own shortcomings, says Schmidt. "They often find it hard to communicate and interact with their international clients," he says. "Where there is an IP issue, they have a hard time explaining what is truly wrong with a client's IP, and clients get frustrated."
In a best case scenario, says Schmidt, international firms work closely with their Chinese counterparts to make sure these shortcomings don't turn into costly errors. "Each side has something to bring to the table," says Schmidt. "The optimum team is embracing a right mix."
This article originally appeared in The Asian Lawyer.
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