Apple to pay $2.5 million to online Chinese publisher for copyright infringement in App Store

Reuters file

Apple was ordered to pay 12 million yuan (S$2.5 million) to a Chinese online publisher in an initial ruling handed down by the Tianjin Binhai People's Court on Monday (Nov 1), months after the country's highest court decided against the US technology giant in another lawsuit.

That ruling in favour of the Tianjin subsidiary of COL Digital Publishing Group, which has been locked in a legal battle with Apple for a decade, found that several unnamed apps on the US firm's online App Store in mainland China published unlicensed content, including popular novels, that can only be distributed by the online publisher, according to a report by national newspaper the China Securities Journal.

The court in the northern city of Tianjin ruled that Apple failed to conduct due diligence to stop the copyright infringement of several third-party apps. Among the intellectual properties (IPs) involved in the case include famous novels by Chinese literary giant Ba Jin.

Apple and COL Digital Publishing's legal battle is expected to continue because the plaintiff's lawsuit concerns 83 separate incidents and 460 different IPs, with the total amount of damages, claimed to reach more than 70 million yuan, according to the China Securities Journal report.

Apple declined to comment on Thursday. A lawyer for COL Digital Publishing confirmed the Tianjin court's ruling, but declined to further comment because the case is ongoing.

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PHOTO: Reuters

This was not the first time COL Digital Publishing hauled Apple to court. The mainland firm has sued Apple four different times since 2012 in cases related to digital works, according to the report.

In April, the Beijing Intellectual Property Court rejected Apple's request to appeal its earlier ruling that the US company infringed on COL Digital Publishing's right to communicate its works to the public. Apple was ordered to pay 368,000 yuan in remedy to the online publisher.

Apple has long prided itself on having a fair and secure ecosystem, but legal pressure from consumers and other parties has shown cracks in the tech company's "walled garden".

The management of Apple's App Store in mainland China has not met the requirements of the country's Copyright Law, according to You Yunting, a senior partner at Shanghai Debund Law Firm.

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"Chinese courts have established rather high standards for duty of care, which means that … you cannot get away from responsibilities when infringement happens on your platform," You said.

Android app stores in China - including those under Baidu, Tencent Holdings, Qihoo 360 and Alibaba Group Holding, owner of the South China Morning Post - "all accept supervision by China's Ministry of Industry and Information Technology", You said.

"At the moment, Apple's App Store still identifies itself as a vendor selling software across the border. So it has not actually been operating on the ground in China."

That issue could come back to bite Apple in the world's second-largest economy, where it has not been faring well in recent litigation.

In a decision handed down in September, the country's Supreme People's Court ruled that a lawsuit filed by a Chinese consumer against Apple's mainland subsidiary on antitrust grounds could proceed in a Shanghai court.

That ruling rejected Apple's plea that its China entity, which mainly distributes the company's products to the local market, should not be sued over issues related to the operations of its App Store in the country.

This article was first published in South China Morning Post.