State-Owned Chinese Film Studio Sues Apple

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Shanghai Animation Film Studio claims the Cupertino-based tech giant sold its films in the iTunes store without proper permission.

A State-owned Chinese animation studio has filed suit against Apple in a Beijing court, claiming the Cupertino-based tech company sold its movies in the iTunes store without approval. 

Shanghai Animation Film Studio, which is backed by the Chinese government and is seen as a leading player in the nascent Chinese animation space, is seeking a little over half a million dollars in damages in the suit, according to a report in the South China Morning Post.

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The SCMP says a senior executive at the Shanghai-based studio confirmed that the litigation had been filed with the Beijing No. 2 Intermediate People's Court, which accepted the case. Apple declined to comment. 

The case comes at a time of growing challenges for Apple in China. Earlier in March, state broadcaster CCTV aired a special feature about the company on its prime time consumer advocacy program, alleging that Apple’s customer service policies in China are inferior to the support it offers customers in other parts of the world. Apple responded in a statement resolutely denying the allegations, but the Chinese state-backed press was quick to condemn the response, with various high-profile stories calling Apple an “empty and self-praising” brand, and attacking the company’s alleged “incomparable arrogance.”

Many analysts have questioned the motives of the seemingly coordinated broadside against Apple in the country’s state media, particularly given that it comes just as Chinese smartphone and electronics makers -- such as Huawei, Lenovo and TCL -- are trying to position themselves as top-tier brands for international consumption.

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Of the new suit, the senior executive at Shanghai Animation told the SCMP: "We want 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].”

“It's a sensitive period now since Apple is a big multinational company and it is surrounded by controversies on its practices in China," he added.

Shanghai Animation Film Studio is best known for producing the classic animated version of The Monkey King. The studio claims Apple and its Chinese subsidiary, Apple Electronics Products Commerce (Beijing), infringed on its intellectual property rights by selling over 110 of its movies without permission, including titles Calabash Brothers and Black Cat Detective.

On Wednesday, Apple was also defending itself in a Chinese court against claims by a local tech company called Shanghai Zhizhen Network Technology, which says Apple’s voice-activated personal assistant, Siri infringed on a patent for its similar technology called "Xiao iRobot" (little mention has been made of the ironic fact that the lowercase "i" at the front of Zhizhen's product's name is an obvious impersonation of Apple's trademark branding). 

China accounts for an increasingly vital share of Apple’s revenue. During his second trip to China as Apple CEO in January, Tim Cook made international headlines when he said China is now Apple’s number two market, adding: “I believe it will become our first -- I believe strongly that it will.”