Apple: Due Diligence versus Fraud

Apple is not one of my favourite companies. I don’t like their products, their way of doing business and their hype. It’s not the right way to do IT.

Lately, Apple has been suing the world over smart thingies like smart phones and tablets that they consider to be their technology. “He who lives by the sword shall die by it” comes true again as a monitor manufacturer claims, in a US court, that “iPad” was acquired by Apple fraudulently. Proview, a Chinese business, sold the “iPad” trademark to a front set up by Apple in 2009. Proview has had mixed results in blocking use of “iPad” in China and now has swung its axe at the root of the tree.

I am not a lawyer, but balanced between the necessity of any business to do due diligence before a transaction and the duty of a participant in a transaction to be open about material facts affecting the value of a transaction is a wide range of opinion. Usually the onus is on the seller but if Apple disguised itself for the purpose of buying a trademark cheaply I can see an argument. It will be fun to watch.

According to Wikipedia, In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation.

That sounds like what Apple did.

Unfortunately, US practice gives lawyers a lot of “outs”:
Common law fraud has nine elements:

  1. a representation of an existing fact;
  2. its materiality;
  3. its falsity;
  4. the speaker’s knowledge of its falsity;
  5. the speaker’s intent that it shall be acted upon by the plaintiff;
  6. plaintiff’s ignorance of its falsity;
  7. plaintiff’s reliance on the truth of the representation;
  8. plaintiff’s right to rely upon it; and
  9. consequent damages suffered by plaintiff.

It’s not clear that Apple or its agent lied, etc. Perhaps Proview knows better and has documents to prove it. We shall see. It would be very interesting to see what would happen if it were ruled that Apple did not own the iPad trademark. How much money would it take now to remedy that?

About Robert Pogson

I am a retired teacher in Canada. I taught in the subject areas where I have worked for almost forty years: maths, physics, chemistry and computers. I love hunting, fishing, picking berries and mushrooms, too.
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