Chinese authorities seize iPads from reseller's shelves

Chinese authorities have seized iPads from a third-party retailer, according to several sources in China, a move apparently brought on by Apple's continued refusal to honor a trademark owned by a Chinese manufacturer for the name iPad.

The seizure by government officials netted 45 iPad 2 units under the auspices of an official investigation over a trademark lawsuit that claims Apple has no right to sell a device named "iPad" in China. That right allegedly belongs to Proview, a Shenzhen-based manufacturer that is fighting hard to claim a $1.6 billion payout from Apple.

Some retailers, after hearing about the raid, are hiding their iPad stock, unsure if the seizure will be an isolated incident or a signal of things to come. There have been no reports of any official Apple stores being investigated or being ordered to hand over stock.

While Apple holds one of the most prolific legal teams in the electronics world, the case for Proview is widely considered to be strong, and given the overwhelming success of the iPad, the US$1.6B settlement is a very realistic outcome.

The Chinese government is typically very supportive of its local industry, especially when such a high price tag for a settlement is in play. It's no secret that corruption still runs strong throughout China, particularly in the technology sector. A positive end to this could be essential to Apple's near-term iPad sales in China.

Does Apple have a chance to come out of this trademark dispute without too much financial damage? Let me know your thoughts in the comments.