Is China Apple’s Legal Landmine?

China’s legal system is not doing Apple (NASDAQ:AAPL) any favors. After an extended battle over the iPad trademark earlier this year with a local company that resulted in delaying the release of the third-generation of the tablet in the country, the iPhone maker has now lost a copyright case in China.

Why is Apple in Trouble?

A Beijing court has ordered Apple to pay 1.03 million yuan, or about $165,000, to a group of writers claiming the company sold unlicensed copies of their books online. According to The Wall Street Journal, China’s Xinhua news agency reported that the Beijing No. 2 Intermediate People’s Court ordered Apple to pay eight Chinese writers and two companies. The group had asked for 10 million yuan in damages.

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Apple is also appealing a September decision by the same court asking it to pay 520,000 yuan to a publisher of encyclopedias, also for alleged copyright infringements.

CHEAT SHEET Analysis: Catalysts for a Stock’s Movement

One of the core components of our CHEAT SHEET investing framework focuses on the factors that could affect a company’s stock. China is one of Apple’s most important markets, contributing $5.7 billion in sales for the fiscal quarter ending in September and representing 16 percent of the company total. Bad press in China can prove costly, though Apple said in a statement that its employees took “copyright infringement complaints very seriously.”

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