As if Apple doesn’t have enough trouble in China with the spotlight being thrown on Foxconn and other manufacturers, a lower Chinese court has now ruled that the company’s iPad should be pulled from shelves over an ongoing trademark dispute with a display company there.

Time Techland is reporting that the Intermediate People’s Court in Huizhou, China “has ruled on Friday that distributors should stop selling iPads” in the country, according to Xie Xianghui, a lawyer for Shenzhen-based Proview Technology, who claims to hold the trademark on the tablet’s name in mainland China.

Apple claims the trademark case is still pending in mainland China, having appealed to the High Court in Guangdong, the southern province where the lower court ruling was made. For their part, Proview is not backing down, “requesting commercial authorities in 40 cities to block iPad sales,” which could have a severe impact on Apple’s ambitious plans in the country.

“We bought Proview’s worldwide rights to the iPad trademark in 10 different countries several years ago,” explains Apple spokeswoman Carolyn Wu. “Proview refuses to honor their agreement with Apple in China and a Hong Kong court has sided with Apple in this matter.”

In a letter to Proview chairman Rowell Yang from Apple’s Beijing-based attorneys King & Wood, the company accuses Proview of breaching “principles of good faith and fair dealing” as well as making “false and misleading” statements.

Proview International Holdings first registered the iPad trademark in China way back in 2001, where it was “used for a computer described as an ‘Internet Personal Access Device’ that employed touch panel technology.” Apple purchased the iPad name from a Proview affiliate in Taiwan back in 2009 for a mere $55,000, but a ruling from a mainland China court back in December claims Proview “is not bound by that sale.”

One thing’s for certain: The iPad trademark dispute in China is likely to get uglier before it gets better, with Proview no doubt feeling foolish for selling the iPad name trademark for so cheap before they knew what it would be used for. A court document from a ruling in Hong Kong shows that the company “demanded $10 million for the iPad name in China” after the dispute flared up, so it may take a big payment to make this headache go away.

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