Apple Planned the iPad BEFORE the iPhone. Who knew?

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Apple Planned the iPad BEFORE the iPhone. Who knew?

apple-ipad.jpgEveryone assumes that Apple was working on the iPhone before the iPad. However, the recent lawsuit by Proview Electronics suing Apple over the name 'iPad' says others wise. The iPhone was launched in 2007 and the iPad in 2010. However, in 2006 Apple purchased the iPad trademark from display manufacturer Proview Electronics (Taiwan) for $55,000 by way of a front company called IP Application Development. So it appears Apple planned on making a tablet before the iPhone even came to market!

According to TMC's Peter Bernstein, Proview says the trademark deal with Apple did not include the rights to the trademark in China. It says that Proview Technology (Shenzhen), a subsidiary of Proview International in Hong Kong, owns these rights.

Interestingly, back in 2007 Cisco sued Apple over the use of the iPhone name, since Cisco has several products with that name, including a few that I reviewed - the Linksys iPhone Cordless Internet Telephony Kit - CIT200 (one of the first cordless Skype phones) and the iPhone Cordless Internet Telephony Kit - CIT310. But then Apple and Cisco made up and settled the lawsuit. I questioned back in 2007 "what's in it for Cisco?". As part of the settlement, Apple and Cisco will "explore opportunities for interoperability in the areas of security, and consumer and (business) communications". I questioned this vague statement and I was right. Apple and Cisco do absolutely nothing together worth mentioning. Cisco's stock back in 2007 was $30 and now it's $20. Cisco should have taken some Apple stock in the settlement agreement! I know what Cisco is thinking now...fing04

In any case, a Chinese court ruled in favor of Proview and the decision is now under appeal.  TMC's Peter Bernstein writes:

Proview Shenzhen's lawyer Xie Xianghui’s court statement which stated that the company was ready to "slap Apple with a 240 million yuan ($38 million) fine," but the ruling has been delayed due to Apple's appeal. The good news for Apple was that the Xicheng district administration denied Xie's claims of an impending 240 million yuan ruling.  

The posting said it gets better. Xie appears to like to talk with the press, and he told the China Daily that Proview wants and apology as well. He also said the company has more litigation still to come, with separate lawsuits against Apple's authorized retailers and stores in courts around China.  

So the IP bully is getting a taste of its own medicine. When you add it up, Apple is looking at $1.6B in the original infringement case, a possible $38M fine and the issuance of an apology. Even for the world’s most valuable company, this is not just pocket change. The collateral damage on this and the workplace protests could be significant. Proview has home field advantage and any disruption of either the supply chain or damage to the reputation of the company in the over-heated Chinese market for Apple products is non-trivial.

Apple certainly has $1.6B in its deep pockets to pay off the Chinese company if it has to, but it would be a deep blow. It's ironic how Apple uses Chinese workers to build the iPhone and iPad and now it could come to bite them in the ass. On a related note today we had a highly-publicized planned protest against China's Foxconn, the builders of Apple's products for horrid working conditions. It was not been a good day for Apple, though the planned protests seem to have fizzled.


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