A Chinese computer company which sued Apple over the rights to the iPad trademark in China is now in talks for an out-of-court settlement, a lawyer for the firm said Monday.

Proview Technology, based in the southern Chinese city of Shenzhen, has been locked in a drawn-out legal fight with the US technology giant over ownership of the Chinese rights to the "iPad" trademark, which both claim as their own.

"Both parties are now negotiating a settlement," Xie Xianghui, a lawyer for Proview, told AFP.

"Apple and Proview are both willing to reach a settlement and it would be beneficial for both sides to reach an agreement as quickly as possible."

The debt-ridden Chinese company owes banks some $400 million, the Global Times newspaper reported Monday, adding pressure on Proview to make a deal.

"Now the two sides are disputing the amount of compensation because the difference between the demands of each party is relatively big," Xie said, but declined to say how much Proview had sought.

Apple could not immediately be reached for comment.

Proview Technology's Taiwanese affiliate registered "iPad" as a trademark in several countries including China as early as 2000 -- years before Apple began selling its product.

The US titan subsequently bought the Taiwanese affiliate's rights -- but Proview claims the deal did not include the trademark in mainland China.

Proview has sued Apple in both the United States and Shanghai, but a court in the eastern Chinese city decided against proceeding with the case.

Proview had also sought bans on iPad sales in China and blocks on imports into and exports out of the country.

China is second only to the United States in demand for Apple products and is expected to reach the top soon. But the US company has faced criticism over its labour practices in the country.

Independent investigators uncovered workplace abuses, including forced overtime, in an audit of Apple supplier Foxconn, the Fair Labor Association said in March.