Every company should be allowed to assert its intellectual property rights (IPR) under the law. But in China recently there have been several cases where businesses have been suspected of leveraging these rights to extort money from, or gain power over, smaller peers.
For example, many suspect Wind Information Co, a financial data provider, of using this strategy on Zhejiang Hithink Flush Information Network Co. Wind recently stated that it would be filing a copyright infringement lawsuit against Hithink and was seeking 99.2 million yuan ($15.92 million) in damages. Yet, Wind was one of the 10 largest shareholders of Hithink until just before the suit was filed.
Wind said that it had tried to resolve its dispute with its competitor on its own, but when negotiations broke down the data provider unloaded its shares and decided to pursue legal action against Hithink.
With IPR still a relatively new concept in the local business community, Chinese firms need to be on their guard against malicious lawsuits based on trumped-up IPR claims.