Apple is being accused of fraud in the latest trademark dispute which erupted in Mainland China and has crossed the ocean to come to the United States. The dispute? A trademark handed over in 2009 over right to use the iPad name. Initially, the dispute was only on branding and selling the iPad in China but bringing the lawsuit to the U.S. changes completely the problem’s dimensions and threatens to have consequences upon Apple’s marketing campaigns on the upcoming iPad 3.

Though some might think that Apple will have a sort of advantage of being prosecuted at home, in Silicon Valley, California, yet, a delay of coming to an agreement with the Chinese company Proview is what will hurt the tech giant more. Apple already lost some battles in China, as several cities such as Huizhou and Shijiazhuang banned any iPad sales.

Also, on February 17, Proview took the case to the Shanghai Pudong New Area People’s Court, and filed a lawsuit against Apple, hoping to win anything between $1.6 and $2 billion, as well as demanding an open written apology from the American tech giant. The dispute is sensitive to Apple as the overall sales and demand in China for the company’s products is extremely high.

The dispute lies in a 2009 agreement between two sides. The Chinese company handed over the trademark rights to Apple for only $55,000. But Proview International, the holding company, claims that the rights exclude Mainland China. If the dispute is not settled as soon as possible, Apple’s plans of releasing on the market the newest versions of iOS 5.1 and the iPad 3 in early March might be delayed.