The lawsuit alleges that CBS Interactive's ZDNet China made the controversial Green Dam filtering software available for download on its Web site and that Green Dam included code copied from Solid Oak's CYBERsitter program.
The Chinese government earlier this year said that all PCs sold in China would have to come with Green Dam installed by July 1.
The government claimed that the software was necessary to protect young people from unhealthy Internet content -- mainly pornographic and violent material -- but human rights groups reported that the software blocked political and religious content too.
Following protests by Chinese academics and computer user, as well as rights groups, computer trade groups, and government officials from various countries, the Chinese government softened its stance.
In an August 13 news conference, Minister of Industrial and Information Technology Li Yizhong acknowledged that the government's mandate "not thoughtful enough," according to China Daily, and said the software would be optional.
Having recognized the problem with mandates that affect consumers directly, the Chinese government is now directing its orders at businesses.
Last month, the Chinese government began requiring Internet service providers and data centers to install "Blue Dam" on their servers, a combination of hardware and software filtering said to be 20 times more effective than Green Dam.
Solid Oak's lawsuit alleges that the developers of Green Dam copied almost 3,000 lines of code from CYBERsitting and incorporated it into Green Dam.
"A central component of the PRC's Green Dam initative was to convince and incentivize online providers to participate by offering the Green Dam software for free download on Internet sites," the lawsuit claims. "Defendant CBS willingly participated in the PRC's plan, offering Green Dam for free download on its Web site, ZDNet China."
The lawsuit claims that Green Dam was downloaded more than 31,000 times and that CBS has benefited by offering the software.
Solid Oak Software is seeking $1,238,450, the number of downloads times the $39.95 price charged for a legal copy of CYBERsitter.
CBS Interactive is not the only company involved in the distribution of Green Dam. Sony, for example, began distributing PCs with Green Dam in late June.
Gregory A. Fayer, an attorney with Gipson Hoffman & Pancione who is representing Solid Oak, said that the company is still weighing its options with regard to additional lawsuits.
He said that the main goal of the lawsuit was to protect Solid Oak's rights, but acknowledged that the case has broader implications for the ability of smaller companies to protect their intellectual property from infringement overseas.
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