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China court rejects injunction against Apple's iPad

China iPad Dispute apple proview AP

Feb. 22, 2012: A man walks out of a digital products mall past an advertisement for the iPad 2 in Beijing, China. Apple Inc. defended its right to use the iPad trademark in China in a heated court hearing Wednesday that pitted the electronics giant against a struggling Chinese electronics company that denies having sold the mainland China rights to the popular tablet computer's name. (AP Photo/Alexander F. Yuan)

A Shanghai court Thursday rejected a Chinese company's request for a preliminary injunction against the sale of Apple's iPad there over a trademark dispute, The Wall Street Journal reported.

The Shanghai court said in a statement that it would suspend proceedings to await the results of a separate case in the Guangdong provincial high court, according to the WSJ. The outcome of that case is seen as crucial to the iPad battle between Apple and the Chinese subsidiary of Proview International Holdings, a computer-display maker.

According to emails and a contract viewed by Dow Jones Newswires earlier this month, Apple agreed more than two years ago to buy the rights to the iPad trademark from Proview for £35,000 ($55,000), to cover several countries, including South Korea, Thailand, Singapore and China.

But Proview is sticking by its claim that it still owns the trademark in China, and is seeking unspecified compensation from Apple. A representative of Proview creditors suggests the compensation claim could range as high as $2 billion.

A Hong Kong court last year sided with Apple, saying the agreement between Proview and an Apple subsidiary was valid. But a court in mainland China was less supportive.

In December, a court in the southern Chinese city of Shenzhen dismissed a suit brought by Apple in which the US company argued that the iPad trademark in China should be transferred to it as part of its earlier agreement with Proview.

Apple's attorneys defended the Cupertino, Calif., based company in Shanghai on Wednesday, saying that a ban on iPad sales in China would cause the company huge losses and hurt the Chinese economy. The tablet's popularity has benefited China through tax revenues and jobs created in its manufacturing, they said.

"They have no market, no sales, no customers. They have nothing," Apple lawyer Qu Miao reportedly said of Proview. "The iPad is so popular that it is in short supply. We have to consider the public good."