Visual China Group is in trouble. At a time when the country has pledged to strengthen its protection of intellectual property rights, the country's largest stock images provider has been accused of abusing them — and even resorting to blackmail — to make a profit.
VCG sparked an outcry nationwide last week after it claimed to own the copyright to the first-ever image of a black hole, the work of a team of 200 international scientists in the Event Horizon Telescope project. Now the Shenzhen-listed company has been forced to shut down its website to "rectify" its problems.
Over the past 10 years, the company, flaunting the banner of IPR protection, has filed tens of thousands of lawsuits against what it claimed are copyright violators. In 2018 alone, nearly 3,000 such lawsuits were lodged.
And as the number of lawsuits have risen, so too have the company's profits from "image content and services", surging by 44 percent year-on-year for the first three quarters of 2018.
But to conclude from the active legal actions VCG has taken that it is an avid defender of IPR would be totally wrong, not least because many of its copyright claims are invalid, such as those of the Chinese national flag and emblem, as well as the logos of companies such as Xiaomi and Baidu. Ironically, VCG has been able to play thief crying "stop thief" for a long time and get away with it.
For the truth is, VCG has used the lawsuits merely as a tool to expand its customer base. More than 90 percent of the cases were settled outside court, with the image provider reportedly cutting the 10,000 yuan ($1,491) per photo compensation it sought from an alleged violator of its copyright to 300 yuan if the latter agreed to become its contracted user.
That may explain why it has enlarged its customer base so rapidly, by 48 percent year-on-year in the first half of 2018, to reach more than 100,000.
The "malicious" lawsuits the company has filed have caused a huge waste of China's judicial resources, and damaged the interests of the real IPR owners and genuine image users.
The company has apologized and promised to change its ways.
But, that it has been able to thrive by taking advantage of China's IPR protection loopholes speaks of an oversight lapse by the government departments in charge.
The "black hole" that has been exposed in China's IPR protection should compel the market regulators to close the loopholes.