The Chinese company accusing Apple of copying its smartphone designs is barely even a company, a new report claims.
Baili, the smartphone maker that recently sued Apple (AAPL) to stop sales of iPhone 6 and iPhone 6 Plus within Beijing’s city limit is “insolvent” and its parent company, Digione, hasn’t competed in China’s smartphone market for more than a year, The Wall Street Journal reported, citing sources who claim to have knowledge of its operations in addition to the newspaper’s review of the companies’ financial statements.
In a statement to the Journal, Digione’s attorney Andy Yang would only say that the company is “still operational in its necessary functions.” He didn’t elaborate on what those “necessary functions” may be.
Baili was put in the spotlight last week after it was revealed that the company had won a court case against Apple that would have forced the U.S. company to stop selling the iPhone 6 and iPhone 6 Plus in Beijing. However, Apple, which was accused by Baili for copying design patents that the Chinese firm holds related to curved edges and other design elements, appealed the case to a higher court and was able to continue selling the iPhone in Beijing.
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Apple made clear in a statement to Fortune after news about the injunction broke that the company would be able to keep selling iPhones in Beijing, pending a ruling from the higher court.
Still, the case is an odd one. Baili is a relatively unknown China-based company and has been unable to break out of the market, like its bigger rivals Huawei and Xiaomi. Indeed, China has a slew of manufacturers that have tried their luck in smartphones, only to see their efforts falter after demand for their products slip or they fail to attract buyers.
Baili, whose 100C smartphone looks somewhat like the iPhone, but could also be mistaken for just about any other smartphone on the market, falls into the category of companies that never gained traction, according to the Journal. It did, however, take advantage of China’s patent laws to target Apple.
In fact, court records show that Baili was granted its design patents in early 2014 and quickly put its 100C on sale in April 2014. Apple’s iPhone 6 was unveiled later that year.
Oddly, Baili hasn’t included 2015’s iPhone 6s and iPhone 6s Plus in its lawsuit, despite those devices having the same design as the iPhone 6. In his interview with the Journal, however, Yang said that Digione and Baili are considering adding the iPhone 6s line to the lawsuit.
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Either way, a lot riding on the case. On Apple’s side, the company must win to keep iPhone 6 models (and perhaps the iPhone 6s line) on store shelves in Beijing, a major Chinese market. For Baili, which the Journal says has more debts than assets, it could mean the difference between making some money from Apple and, if the Journal‘s report is true, potentially ending its run. However, Baili hasn’t said what it would do if it loses its Apple case.
Apple did not immediately respond to a request for comment, and Baili was not available at the time of publication.
