A long-running legal fight between Apple Inc and a debt-laden Chinese firm over the iPad trademark moved to a higher court on Wednesday, in a potentially decisive hearing that will set a precedent for the rest of mainland China.
The Higher People's Court of Guangzhou is hearing an appeal by the U.S. firm after a lower court ruled in favour of Proview Technology, which says it owns the trademark in China and is trying to stop sales there of Apple's wildly popular tablet computer.
"We feel that Apple has not provided too much new evidence," said Roger Xie, a lawyer representing Proview Technology (Shenzhen), ahead of the hearing.
"Using this evidence, I feel Apple cannot say that it has the right to the iPad trademark in China. Therefore, I feel Apple does not have a case to overrule the original verdict in this appeal," Xie told Reuters.
The verdict of the higher court -- which is not expected immediately -- is usually final under Chinese law, and will set a precedent for other cases in lower courts around China.
The legal tussle has crimped some sales of the iPad and also spread to the United States, where another subsidiary of near-bankrupt Hong Kong-listed Proview International Holdings Ltd has brought a lawsuit accusing the world's most valuable technology company of using deception to acquire the iPad trademark.
A week ago, a Shanghai court rejected a request by Proview Technology (Shenzhen) to block Apple from selling iPads in China's richest city, saying that it would depend on the ruling of Guangzhou's high court.
The case moved to the high court after the Intermediate People's Court in Shenzhen rejected Apple's complaint against Proview Technology (Shenzhen) over the infringement case. Guangzhou and Shenzhen are in the booming southern province of Guangdong.
Dispute simmering for years
Lawyers said a final decision by the high court could take weeks, if not months.
"This case is quite special because it has attracted a lot of attention and viewpoints from different groups of people in society, including conflicting viewpoints from some famous people and government figures," said Jeremy Zhou, a partner at Joinway Law Firm in Shanghai.
The legal battle has been simmering for years. Apple says it bought Proview's ownership of the trademark in various countries, but the Chinese company, once a global monitor maker, argues that it retains rights to the iPad name in China.
The financially troubled technology company has already petitioned Chinese customs to stop shipments of the iPad in and out of China, although the authorities have indicated that such a ban would be difficult to impose.
Proview Technology (Shenzhen) Chairman Yang Long-san told Reuters earlier this month that it would favour an out-of-court settlement. Some analysts said financial compensation from Apple would help rescue the debt-laden company.
China is Apple's second-biggest market and a major production base for its products, including the iPhone, iPad and iPod.
The iPad dominates the tablet PC market with a 76 per cent market share in China. There are three Apple retail stores in Shanghai and two in Beijing
Apple is expected to unveil the third incarnation of the iPad at a media event in California next week.
A delay in an outcome of the court case could impact sales of the iPad in China, with consumers turning to devices smuggled from neighbouring Hong Kong as some stores take iPads off the shelf.
Over the past few weeks, Proview's efforts have borne fruit as local media reported that some cities had started enforcing Proview's request to remove iPads.
"If this case drags on without a verdict, it might leave a bigger space for both sides to look into a settlement," Joinway Law Firm's Zhou said.