SAN JOSE, Calif. (CN) – A month before it unveiled its iPad, Apple used a special-purpose entity it created for the “sole purpose” of persuading a cash-strapped Taiwanese tech firm to sell its “iPad” trademark on the cheap, Proview Electronics claims in Superior Court.
Proview and its California subsidiary Proview Technology sued Apple and IP Application Development, of the United Kingdom, in Santa Clara County Court.
Proview says in the complaint that Apple attorneys incorporated IP Application Development in England as a “‘special purpose’ entity whose sole purpose was to obtain the iPad trademarks while obscuring the relationship between Apple and the acquisition of the iPad trademarks.”
Proview claims it began developing an Internet gadget called the iPAD with National Semiconductor in the late 1990s. The complaint describes the gadget as “an all-in-one Internet terminal with a built-in 15 inch color monitor.”
In August 2000, Proview and National Semiconductor held a press conference to unveil their iPAD. Proview filed for and received registered trademarks for “I-PAD,” “IPAD,” and “iPAD” in the European Union, South Korea, Mexico, Singapore, Indonesia, Thailand, and Vietnam, and received the trademark in China in 2001, according to the complaint.
Proview says that in 2005 it entered into a “strategic alliance” with Motorola to develop Internet television using its iPAD core technology, and in 2008 “began cooperating with Elitegroup Computer Systems and Shenzhen Zhicheng Ltd to develop an iPAD all-in-one computer and netbook.”
By the end of 2008 however, Proview’s top two customers – Polaroid and Circuit City – filed for bankruptcy.
“This, in combination with the global financial crisis, caused Proview’s business to stagnate due to excessive inventory and lack of available credit,” the complaint states. “As a result, Proview was forced to begin a reorganization process.”
Proview claims that Apple began investigating the iPad trademarks in 2009, in preparation for the launch of its own iPad device, then set out to acquire Proview’s trademarks.
First, Proview claims, Apple’s attorneys at Edwards Angell, Palmer and Dodge incorporated IP Application Development in the United Kingdom. Proview claims the new corporation’s name was “deliberately chosen because its abbreviation is iPad – IP Application Development.” (Underlining in complaint).
Proview claims that in August 2009 it received a call from a man who identified himself as Jonathan Hargreaves, who was interested assigning Proview’s iPAD trademarks to IP Application Development.
“It was later revealed in an affidavit submitted by Apple on May 20, 2010 to Hong Kong Court that ‘Jonathan Hargreaves’ was an alias for someone named Graham Robinson,” according to the complaint.
After exchanging several emails with “Hargreaves,” Proview said, it asked what IP Application Development’s full name and address were and what the company’s main activity would be. Hargreaves told Proview that IP Application Development would not be competing with Proview, according to the complaint.
Proview says that as negotiations continued by email, the company asked Hargreaves why IP Application Development wanted the trademark, whether it wanted to license or purchase the mark, how much it was willing to pay, and what the terms and conditions would be.
“On September 8, 2009, in response to Mr. Lo’s [Proview UK’s managing director] email, Mr. Hargreaves stated that IP Application Development Limited wanted the IPAD trademark because it ‘is an abbreviation for the company name IP Application Development Limited’ and, once again, assured Mr. Lo in writing that his company would ‘not compete with Proview,” according to the complaint.
The complaint states that Hargreaves wrote in a Sept. 8, 2009 email: “‘We would like to buy the trademark, rather than license it. We do not think this will require any complicated business terms, and could be accomplished in a simple transfer document, with payment being made from our company to Proview as soon as the papers are signed.’
“‘IPAD is an abbreviation for the company name IP Application Development Limited. This is a newly formed company, and I’m sure you can understand that we are not yet ready to publicize what the company’s business is, since we have not yet made any public announcements. As I said in my last message, I can assure you that the company will not compete with Proview.'”
The complaint continues: “Knowing that Proview was having financial difficulties, on October 21, 2009 Mr. Hargreaves threatened to initiate legal action to cancel Proview’s trademarks, which would have caused Proview to incur significant costs in opposing such an action, if Proview did not agree to sell them.
“After several months of additional back and forth between Proview and Mr. Hargreaves, the IP Application Development Limited entered into an agreement with Proview Electronics Co. Ltd. on December 23, 2009 to purchase all IPAD related trademarks owned by Proview Electronics Co Ltd for the sum of 35,000 pounds British Sterling. …
“One month later, on January 27, 2010 Apple announced the introduction of its tablet computer called the ‘iPad.’ Apple’s iPad went on sale in the US market on April 3, 2010.”
(Thirty-five thousand British pounds, at the time, was worth about $57,000 U.S.)
Proview wants its IPAD trademarks back, rescission of contract, punitive damages for fraud by intentional misrepresentation and concealment, fraudulent inducement, and unfair competition, and an injunction.
It is represented by Jill Kopeikin and Robert Luckinbill, with GCA Law Partners, of Mountain View.