Chinese animation studio sues Apple over illegal iTunes movie sales

appleApple is facing a lawsuit worth $531,000 U.S. (3.3 million Chinese yuan) by a Chinese animation studio claiming that the company is selling its work without approval or permission.

The Shanghai Animation Film Studio, a state-owned and operated media studio, is suing Apple Inc. and its Chinese subsidiary Apple Electronics Products Commerce (Beijing) for providing “unauthorized download services” of its work, in addition to infringing on the studio’s intellectual property rights by selling its work without license. According to the lawsuit, Apple is illegally selling 110 different titles produced by the studio, including Black Cat Detective and Calabash Brothers.

A spokesman for the studio told the South China Morning Post that the studio “want[s] to keep tight-lipped on this case because, as we see it, it’s just a litigation in which we want to get compensation [for our product],” adding “It’s a sensitive period now since Apple is a big multinational company and it is surrounded by controversies on its practices in China.”

Amongst those controversies are a continuing lawsuit brought by another Shanghai-based company, Shanghai Zhizhen Network Technology. It claims that the iPhone’s Siri feature infringes on a patent the company owns for its “Xiao iRobot” (note the irony of Apple being accused of infringing on a patent relating to someone else’s product that uses the Apple lower-case “i” ahead of the product name).

At the same time, Apple was the subject of a report on the state-run CCTV in early March that alleged that the company was offering lower quality customer service in China than it does to customers around the world, an allegation immediately denied by the company. Unfortunately, that denial then itself became the subject of derision from Chinese media, with the company described as “empty and self-praising” and possessing “incomparable arrogance” in its response to the accusation.

China represents the second largest market for Apple product in the world (behind America), so it must rankle the company to continually be on the defensive there. In addition to these three ongoing woes, the company has previously faced legal action in China over its Snow Leopard trademark and iPad trademark. Clearly, the Chinese tech market can be somewhat fraught with litigation.

Apple is, unsurprisingly, refusing to comment on the Shanghai Animation Film Studio lawsuit or allegations that it has been selling video content illegally. The company rarely, if ever, comments on ongoing legal issues – but it’s hard to imagine that there’s more to this than meets the eye. Surely a third party must have managed to convince Apple that it did have permission to sell the movies and/or license for content from the studio. What else could possibly be an explanation for why the company would take a high-profile and large scale risk by offering content and hoping no one would notice?