Apple's China legal battle over iPad spreads to U.S.

A Chinese firm trying to stop Apple Inc from using the iPad name in China has launched an attack on the consumer electronics giant's home turf, filing a lawsuit in California that accuses it of employing deception when it bought the trademark.

A unit of Proview International Holdings Ltd, a major computer monitor maker that fell on hard times during the global financial crisis, is already suing Apple in multiple Chinese jurisdictions and requesting that sales of iPads be suspended across the country.

Last week, Proview Electronics Co Ltd and Proview Technology Co filed a lawsuit in Santa Clara County that brings their legal dispute to Silicon Valley.

Some legal experts said there could be different outcomes from the U.S. and Chinese cases, but a spreading of the lawsuit and delay in coming to settlement terms could hurt Apple more.

"In relation to the U.S., Apple is going to somewhat have a homeground advantage," said Elliot Papageorgiou, a Shanghai-based partner and executive at law firm Rouse Legal (China).

At stake for Apple is its sales and shipments in China, where its CEO Tim Cook said it was merely scratching the surface. Debt-laden Proview International, meanwhile, needs to come up with a viable rescue plan before mid-2012 or else it faces delisting from the Hong Kong stock exchange.

"Given the current timeline, Apple would have the greater impetus to come to settlement simply because the ability to disrupt shipments is more immediate than the pressure faced by Proview and its potential delisting," said Papageorgiou.

Proview accuses Apple of creating a special purpose entity -- IP Application Development Ltd, or IPAD -- to buy the iPad name from it, concealing Apple's role in the matter.

In its filing, Proview alleged lawyers for IPAD repeatedly said it would not be competing with the Chinese firm, and refused to say why they needed the trademark.

Those representations were made "with the intent to defraud and induce the plaintiffs to enter into the agreement," Proview said in the filing dated February 17, requesting an unspecified amount of damages.

Apple on Friday reiterated its statement saying that it had bought Proview's worldwide rights to the iPad trademark in 10 different countries several years ago. It also said that Proview had refused to honor their agreement and a Hong Kong court had sided with the U.S. technology giant in the matter.

"Our case is still pending in mainland China," Apple said.

DISPUTE HINGES ON 2009 DEAL

The battle between a little-known Asian company and the world's most valuable technology corporation dates back to a disagreement over precisely what was covered in a deal for the transfer of the iPad trademark to Apple in 2009.

Authorities in several Chinese cities, such as Shijiazhuang and Huizhou, have already banned the sale of iPads, citing the legal dispute.

Proview, which maintains it holds the iPad trademark in China, has been suing Apple in various jurisdictions in the country for trademark infringement, while also using the courts to get retailers in some smaller cities to stop selling the tablet PCs.

Major electronics retailer Suning has resumed selling iPads online this week in China after it stopped sales last week due to a supply shortage, rather than because of the lawsuit, company executives said.

China is becoming an increasingly pivotal market for Apple, which sold more than 15 million iPads worldwide in the last quarter alone and is trying to expand its business in the world's No. 2 economy to sustain its rip-roaring pace of growth.

It now has a 76 percent market share in China's tablet PC sector, followed by Lenovo Group Ltd and Samsung Electronics Co Ltd that have a combined share of only 10 percent, data from research firm IDC showed.

The country is also where the majority of its iPhones and iPads are now assembled, in partnership with Taiwan's Foxconn.

A Shanghai court this week threw out Proview's request to halt iPad sales in the city. But the outcome of the broader dispute hinges on a higher court in Guangdong, which earlier ruled in Proview's favor.

The next hearing in that case is set for February 29. Proview lawyers said there might not be a decision immediately and it could take weeks or months before there was an outcome.

"It is more appropriate for both parties to mediate. I think that is the best outcome," David Chen, senior partner at Allbright Law Offices in Shanghai.

China's trademark system is a minefield of murky rules and opportunistic "trademark squatters" that even the world's biggest companies and their highly-paid lawyers find hard to navigate.

Legal experts say the onus is on companies looking to do business in China to understand how China's trademark law works, as it differs greatly from that of the United States.

Industry executives have said employing special-purpose entities to acquire trademarks is a frequent tactic in China.

Dutch researchers invent a process to turn plants into plastics

It should come as no surprise to learn that the world is over reliant on petroleum, from the gas we put in cars to the plastic bags we take groceries home in. We're still trying to figure out how to make electric cars popular, but scientists at Utrecht University in the Netherlands may have solved the plastic bag half of the problem, creating an innovative new process that turns plant material to plastic.

Being able to convert plants to plastic isn't new, but the ability to make the conversion cheaply and efficiently is. The new technology uses a new type of iron nanoparticle catalyst to synthesize ethylene and propylene, the basic components of most modern plastics, from plant material.

This means that just about everything we use with plastic in our daily lives, from cars to paint, could one day come from a 100% renewable source. And since the process uses waste products such as branches and grass clippings, this new method of making plastic doesn't need to compete with the food supply for acreage.

The innovation isn't all good news, however — it has its share of environmental critics. Converting biomass to plastic means you're creating a new non-biodegradable product, potentially adding to landfills if people don't recycle. Further, there's concern that companies may be tempted to raze endangered-animal-filled rainforests for the purposes of gathering more biomass and creating new fast-growing grass fields for harvest.

For Facebook 'Hacker Way' is way of life

Facebook's billionaire CEO Mark Zuckerberg calls himself a "hacker".

For most people, that word means something malicious — shady criminals who listen in on private voicemails, or anonymous villains who cripple websites and break into email accounts.

For Facebook, though, "hacker" means something different. It's an ideal that permeates the company's culture. It explains the push to try new ideas (even if they fail), and to promote new products quickly (even if they're imperfect). The hacker approach has made Facebook one of the world's most valuable Internet companies.

Hackers "believe that something can always be better, and that nothing is ever complete," Zuckerberg explains. "They just have to go fix it — often in the face of people who say it's impossible or are content with the status quo."

Zuckerberg penned those words in a 479-word essay called "The Hacker Way", which he included in the document the company filed with government regulators about its plans for an initial public offering. The company is seeking $5 billion from investors in a deal that could value Facebook at as much as $100 billion.

The 27-year-old, who has a $28.4 billion stake in the stock deal, uses the H-word 12 times in the essay; "shareholder" appears just once. Should Zuckerberg have left those references out of his IPO manifesto, knowing full-well it could scare off potential investors? He could easily have described Facebook as "nimble" or "agile" instead.

"Symbolically, it doesn't bode well to Facebook and to potential investors," says Robert D'Ovidio, an associate professor of criminal justice at Drexel University in Philadelphia who studies computer crime. "I think it shows maybe an immaturity on his part. He should definitely know better."

By using the word, Zuckerberg is also trying to reclaim it. To him, Steve Jobs and the founders of many of the world's biggest technology companies were hackers.

"The word 'hacker' has an unfairly negative connotation from being portrayed in the media as people who break into computers," Zuckerberg writes. "In reality, hacking just means building something quickly or testing the boundaries of what can be done."

To be fair, the meaning has become complicated. Bad hackers destroy things with evil intentions. They break into the voicemails of crime victims and celebrities in search of a hot news story. They breach security systems to steal credit card data. Just this week, members of the loose-knit group Anonymous hacked into law enforcement websites around the world and gained access to information about government informants and other sensitive information.

Good hackers break things, too, sometimes. But they do it in the name of innovation. They call themselves "white hat" hackers to counter the criminal "black hats." Often, they're hired to expose security vulnerabilities at big corporations. Kevin Mitnick, who was convicted and sent to prison in the 1990s for computer hacking, now works as a security consultant. It's the flip side of his past life, when he spent years stealing secrets from some of the world's largest corporations.

"I break into computers to find holes before the bad guys do," he says.

To Mitnick, Zuckerberg's "Hacker Way" is about finding clever ways to fix problems. It can also mean identifying a new use for something old.

Nathan Hamblen, who works for the website Meetup.com, says the best hacks are those that do something unexpected, something surprising that no one else has thought of.

The term "hacking" dates back more than half a century, when geeks at the Massachusetts Institute of Technology were tweaking telephone systems and computers.

"MIT was the Mesopotamia of hacking. That's where hacking culture began," says Steven Levy, the Wired Magazine writer who authored the 1984 book "Hackers: Heroes of the Computer Revolution."

The small community of hackers in the 1950s and '60s judged one another on their creative and technical abilities, and wore the term as a badge of honor, says Levy, in much the same way that Zuckerberg does today.

"They were the ones who did what you weren't supposed to do on a computer," Levy explains.

Some were pranksters, too. In the 1970s, before they founded Apple, Steve Jobs and his buddy Steve Wozniak figured out how to break into telephone systems and make free phone calls. In one infamous prank, the two Steves dialed up the Vatican to find out who would pick up.

"Wozniak pretended to be Henry Kissinger wanting to speak to the pope. 'Ve are at de summit meeting in Moscow, and we need to talk to the pope,' Woz intoned. He was told that it was 5:30 a.m. and the pope was sleeping," writes Walter Isaacson in his recent biography of Jobs.

It wasn't until the 1980s and '90s that hacking took a bad turn. Some blame Robert Morris, a computer science student who discovered a vulnerability in the Internet's inner workings and unleashed the world's first computer worm in 1988.

"He essentially brought the Internet to a grinding halt," says D'Ovidio, the criminal justice professor. Morris was the first person charged under the federal Computer Fraud and Abuse Act that had been enacted two years earlier.

Then came movies like 1983's "War Games," which also fueled the public's fear of hacking. In the film, a hacker unwittingly comes close to starting the next World War, thinking it's all a computer game.

"It happened because of Hollywood and because there was no other word out there," says Andrew Howard, 28, a research scientist at the Georgia Tech Research Institute. "Hacker is a cool word, right? It's a neat-sounding word."

The '80s and '90s were also a time when computers spread from geek circles to office cubicles and home desktops. They were becoming mainstream. But they were still mysterious to most people. They wondered: "How do they work? Is someone going to break into them?"

Zuckerberg's hacker manifesto is a nod to Levy, who codified "The Hacker Ethic" in his book about the subculture. Among the principles: "Hackers should be judged by their hacking" and "Always yield to the hands-on imperative."

The hands-on imperative is important to Facebook. Zuckerberg still spends hours writing computer code, even though he has hired hundreds of engineers.

That ethos helped Zuckerberg's social network to prosper. As the once mighty MySpace stopped innovating, its users flocked to the cleaner, crisper, always-changing Facebook. News Corp. gave up on MySpace and sold it for $35 million last June. Meanwhile, Facebook's user base ballooned to 845 million, even as the website has gone through changes and redesigns that have angered members and privacy advocates.

Zuckerberg and others may yet be able to clean up the term. Meetup's Hamblen thinks it's already happening.

"People aren't as afraid of technology, which was driving the fear of hackers," he says. "It was someone doing something with software that you don't understand. As people become more comfortable with technology in general, then hacking becomes a way of seeing it as using it in a clever way."

Technology companies, from the tiniest startups to those such as Facebook and online game maker Zynga, take the hacker ethic to heart. They host regular "hackathons," where engineers pull caffeine-fueled all-nighters writing computer code, usually working together on projects that are not part of their day-to-day jobs. Some of Facebook's biggest features, including chat, video and the new Timeline, came out of these hackathons, as Zuckerberg explained in the filing.

"Hackers believe that the best idea and implementation should always win — not the person who is best at lobbying for an idea or the person who manages the most people," he writes.

This is the ethic that can lift fresh-faced college grads (or dropouts) to the highest echelons of the technology elite, or at least to a good job.

Cadir Lee, the chief technology officer at Zynga, the company behind the biggest games on Facebook, says he "absolutely" refers to himself as a hacker. Lee says, at Zynga the hacker way means being agile. It's not the end of the world, say, if a game isn't perfect when players first see it, or if it has a bug that needs to be fixed. Think of it as live TV, Lee suggests.

"The charm of 'Saturday Night Live' is that every once in a while you see a boom mic, or they forget their lines or crack up," says Lee. "But it's better to get something out there and entertain than to not have any show."