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China higher court hears Apple's iPad appeal

Apple and Proview went head-to-head in a Chinese court this morning. Apple argued in the Higher People's Court of Guangzhou that it owns the right to use the iPad trademark in China. Proview's lawyers argued that Apple bought the trademark from Proview's Taiwan subsidiary, not the one in Shenzhen. Proview Shenzhen claims it still owns the trademark and is seeking an out-of-court settlement.

Legal experts cited by Reuters say this is a crucial case for Apple. The verdict of this higher court is usually the final ruling in China. Apple can appeal to China's Supreme People's Court and ask for a retrial, but these requests usually don't change the outcome of the original verdict. If Apple loses, the Cupertino company would either have to settle with Proview for a large dollar sum or change the name of the iPad.

A verdict in this case is not expected right away which gives both sides time to consider their strategy. Legal expert, Jeremy Zhou of Joinway Law Firm in Shanghai, believes a long trial could lead to a settlement, which would be a favorable outcome for the cash-strapped Chinese company.

The timing of this case is terrible for Apple. The company is about to launch the iPad 3, and a negative ruling could affect future sales of the device.

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