About two months ago I wrote about Apple’s ongoing trademark woes in China (see post here). To briefly recap – Proview, a Chinese display manufacturer, had trademarked IPAD in China in 2001. Apple thought it had purchased the rights to this mark, but Proview contended that the agreement covered ten other countries and not China. Both parties received favorable and unfavorable court rulings on the agreement in different countries, but the end result was ambiguity surrounding who is the rightful owner of the mark, leading to several large Chinese retailers halting sales of Apple’s iPad.

A prior court ruling in China presented Apple with potentially enormous fines that hinged on the outcome of future litigation. Fast-forwarding to today, the Chinese court is urging the two parties to settle their differences by mediating the dispute. The Chinese court is certainly aware of the water Apple draws from its wells, and this move is most likely an attempt to avoid the economic and political effects that an unfavorable ruling against Apple may incite.

It has been suggested that the law favors Proview in this situation, but a lawyer for Proview recently expressed his view that the case would likely settle out of court. This sentiment is undermined by Apple’s litigious reputation and its release of a large collection of documents earlier this year supporting its position.

So what is likely to happen? Apple appears to firmly believe that it is correct in this situation, but is also aware that the law favors Proview. I feel that if Steve Jobs were around he would throw good money in after bad, fighting tooth and nail for a victory. That isn’t necessarily the best strategy though. It may be a lot easier, cheaper, and safer to simply settle, rather than risking an enormous fine and losing the trademark rights altogether.

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