Apple to pay $53 million in class-action suit following iPhone warranty policy

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Bring your faulty iPhone into your local Apple Store and probably the first thing the technician behind the Genius Bar troubleshooting your device will do is check the status of Liquid Contact Indicator, which signals excessive exposure to water.

This hidden tape strip reacts to moisture and can be found in your device’s headphone jack and charging port. The status of your warranty coverage depends on its color: if it is white, you pass, which means you are probably not responsible for replacement costs; if it is pink, your warranty is void, which can lead to expensive repair costs.

Apple’s practice of not honoring its hardware warranty based on this practice led to a class action lawsuit against the company in California.

Apple has reportedly agreed to pay up to the tune of $53 million in a settlement, nearly $16 million of which will go toward the legal counsel of the plaintiffs, and should be filed in a San Francisco federal court in the coming days, according to Wired.com.

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The Justice Department probing Apple and five major US publishers over alleged price fixing of electronic books

The Wall Street Journal reports that the United States Justice Department threatened to launch an antitrust lawsuit against Apple and five of the nation’s biggest book publishers over an alleged price-fixing that has resulted in higher prices of e-books.

Several of the parties have held talks to settle the antitrust case and head off a potentially damaging court battle. If successful, such a settlement could have wide-ranging repercussions for the industry, potentially leading to cheaper e-books for consumers. However, not every publisher is in settlement discussions.

The government is specifically aiming to probe CBS Corp.’s Simon & Schuster Inc., Lagardere SCA’s Hachette Book Group, Pearson PLC’s Penguin Group (USA), Macmillan, a unit of Verlagsgruppe Georg von Holtzbrinck GmbH, and HarperCollins Publishers Inc., a unit of News Corp. that also owns The Wall Street Journal.

At question: The so-called agency model where publishers freely set prices of their titles on Apple’s iBookstore before the Cupertino company reaps 30 percent of the proceeds. The freedom to pick the price has led most—if not all— publishers to allegedly raise prices of e-books across the board as they feared customers would get accustomed to inexpensive $9.99 Kindle books from Amazon.

Barnes & Noble CEO William Lynch already gave a deposition to the U.S. Justice Department. He said abandoning the agency model would allow a single party to achieve dominance in the marketplace, alluding to Amazon. According to the people familiar with the matter, the U.S. Justice Department believes that Apple and the publishers “acted in concert to raise prices across the industry, and is prepared to sue them for violating federal antitrust laws.”

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Apple: iPad has become brandnomer for tablets, letting Proview use the moniker would hurt and confuse consumers

The iPad maker is defending its moniker by insisting the device became synonymous with both the company name and the tablets. PCWorld quotes Apple’s legal representatives who argued at the Guangdong Province Higher People’s Court hearing this morning that Apple made the iPad name famous in the first place:

Among consumers across the world, the iPad trademark is already uniquely connected with Apple. When consumers see a tablet with an iPad trademark, they know it comes from Apple, and not from another company.

No ruling occurred during the six-hour long hearing, and the judges adjourned without setting a new court date. Should Apple lose the appeal, Proview’s request to put a sales ban on the iPad in 30 Chinese cities will go-ahead. Moreover, Apple would risk lawsuits seeking damages. Last week, the Shanghai Pudong New Area People’s Court rejected a preliminary iPad sales injunction until the Guangdong court made its ruling on the appeal.

Apple’s argument might actually backfire, because its legal standoff with Proview has blown up. Wikipedia claims, “A trademark owner takes a risk in engaging in such a corrective campaign because the campaign may serve as an admission that the trademark is generic.” I am not a lawyer, but it seems obvious Apple might be calling upon itself long-term damage with this testimony.

Arguing that the iPad became a generic term for tablets theoretically means anyone could use it as a descriptor. Besides, why do you think Proview brought this battle to the United States? The opposite argument is that Apple actually owns the iPad name, and it is the only company marketing a product that became synonymous for tablets in the first place.

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Fighting Proview in Shanghai Showdown, Apple highlights iPad’s benefits to China’s economy

An important update as a Shanghai court hearing this morning confronted Shenzhen, China-based LCD display maker Proview and Apple of California, the maker of the widely popular iPad tablet. The high-profile hearing drew more than a hundred reporters. As you know, Proview is dreaming of a multi-billion dollar settlement for rights to the iPad name in China where Apple pushes aggressively with claims it acquired the iPad trademark in 2009 from Proview’s Taiwanese affiliate for about $55,000. Associated Press this morning described a heated exchange between cash-strapped Proview, which recently filed for bankruptcy, and the Silicon Valley giant. At stake: A countrywide import and export ban on the iPad that enjoys a 76 percent share in China.

If enforced, the ban could easily disrupt worldwide iPad availability, because the world’s largest contract manufacturer Foxconn at its plants in the Chinese province of Shenzhen manufactures the tablet. Worse, it could disrupt a future iPad 3 launch allegedly scheduled for March 7 unveiling. So yeah, it is all about money.

Proview representatives presented as court evidence the company’s 2000 iMac-lookalike named IPAD (pictured on the right). The lawyers came down with all guns blazing on Apple, and said: “Apple has no right to sell iPads under that name.” The company’s CEO told reporters “both sides have willingness to negotiate,” and asserted, “both sides will submit their plans before the talks,” because an out-of-court settlement “is quite possible.”

To this, Apple responded:

They have no market, no sales, no customers. They have nothing. The iPad is so popular that it is in short supply. We have to consider the public good.

Reuters followed up with another quote attributed to Apple’s legal team:

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.

Explaining Proview has not sold or marketed its IPAD computer system in years while Apple only began selling the iPad tablet in 2010, the company said the fact essentially invalidates Proview’s trademark. Lawyers for Proview cried foul, and claimed any public good achieved through the creation of iPad manufacturing jobs in China and tax revenues should not be confused with trademark infringement:

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Proview tries to block iPads from coming in or going out of China

Not content with officials yesterday confiscating iPads in Shijiazhuang over an ongoing litigation on the iPad moniker, Taiwanese company Proview Electronics is now looking to put a ban on both iPad imports and exports, according to Reuters. The company is already petitioning Chinese customs to stop shipments of iPads. Proview sued Apple last year over its “I-PAD” trademark and could seek up to $1.5 billion for the name from the Cupertino, Calif.-headquartered gadget powerhouse.

Apple is in an increasingly difficult place here. Considering every iPad is built in China (until Brazil plants go online), a full-blown export ban could disrupt the iPad business on a global scale. Proview’s legal position stems from Chinese laws that seek to prevent the sale of counterfeit goods in the country. The news gathering organization confirmed the development this morning:

A Chinese tech firm claiming to own the “iPad” trademark plans to seek a ban on shipments of Apple Inc’s computer tablets into and out of China, a lawyer for the company, Proview Technology (Shenzhen), said on Tuesday.

Proview also asked the country’s Administration Industry and Commerce to put in effect iPad confiscations in as much as 30 cities. Apple’s position in this dispute remains unchanged as a spokesperson re-iterated the official line:

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.

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Apple gets a break as EU antitrust watchdog launches full-blown probe into Samsung over essential 3G patents

European Union regulators today announced the launch of a formal investigation of Samsung over mobile patents to determine whether the South Korean conglomerate breached EU antitrust rules in its legal dealings with competitors. The investigation is focused on so-called FRAND patents, a common rule that stipulates a patent applying to the standard must be adopted on “fair, reasonable, and non-discriminatory terms” (FRAND). According to the press release, EU regulators want to figure out whether Samsung “used certain of its standard essential patent rights to distort competition in European mobile device markets, in breach of EU antitrust rules.”

The Commission reminds that Samsung a decade ago promised to let rivals license its mobile patents under FRAND terms. The full-blown investigation comes in the light of the lawsuits Samsung filed against Apple at courts in Germany, France, the Netherlands and other countries around the world, asserting copyright infringement related to patents essential to wireless telecommunications standards.

The case is “a matter of priority,” the document reads. Patent blogger explained, “The European Commission can’t wait until Samsung finally wins a ruling based on such a patent and enforces it, potentially causing irreparable harm.” The full text of the European Commission Antitrust Commission announcement can be found below.

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