Apple fights for iPad trademark in China’s largest city

Apple Store in Shanghai

The fight over whether Apple(s AAPL) has the right to sell the iPad in China continued Wednesday in Shanghai, China’s most populous city and one of the most important places for Apple doing business in the country. Chinese manufacturer Proview wants to ban the iPad from all stores in Shanghai over a trademark dispute. Apple’s lawyers argued that it is in China’s national interest to keep iPads on the market.

Apple contends that Proview is trying to dispute a trademark and remove a product for sale even though it has no alternative product. “Proview has no product, no markets, no customers and no suppliers. It has nothing,” one of Apple’s lawyers told the court, according to Reuters.

Proview Technology, a manufacturer of flatscreens, launched a tablet called IPAD in 2000 and registered the trademark. In 2006, Proview Electronics, which shares a parent company with Proview Technology, sold Apple the use of the IPAD name, but the companies are at odds over whether Apple is covered to sell the devices everywhere in the China market. Proview is also in some deep financial straits, so it is probably to be expected that it is offering Apple a deal: Proview says it will settle the case for about $1.6 billion.

Apple wants to continue the fight. Here is Apple’s official statement:

 “We bought Proview’s worldwide rights to the iPad trademark in 10 different countries several years ago. Proview refuses to honor their agreement with Apple in China and a Hong Kong court has sided with Apple in this matter. Our case is still pending in mainland China.”

Apple lost this argument in lower courts in China, including a ruling back in December. Proview has since broadened its case, and asked last week that the iPad not be shipped in or out of China.

Though not being able to sell in Shanghai — Apple has three stores in that city alone — would be a a huge setback, not being able to ship the devices, which are made in China — would be a bigger blow to the iPad business. China is the second-largest market for Apple, and the company’s expansion there in the last year has been a huge boon to its bottom line. But Apple’s argument of how important the iPad is to China too is undeniable.

Apple’s lawyer in Wednesday’s proceeding put it this way: “Apple has huge sales in China. Its fans line up to buy Apple products. The ban, if executed, would not only hurt Apple sales but it would also hurt China’s national interest.”

The Shanghai court has not yet issued a ruling on the matter.