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A Shenzhen-based video-sharing company has sued the local market and quality supervision commission, demanding to call off a 260 million yuan ($39.5 million) penalty imposed on the company for alleged patent rights violations.

Shenzhen QVOD Technology was fined in June 2014 by the market and quality supervision commission in Shenzhen in south China’s Guangdong province, after the Internet giant Tencent reported to the commission, claiming that QVOD has infringed upon its patent rights to stream information online.

The commission said QVOD streamed some 24 TV series or films on its platform without approval from the videos’ patent owner. It ordered that the company pay off the penalty within 15 days, otherwise more fines will be imposed at a rate of 3 percent per day, the Beijing Times reported.

QVOD filed the lawsuit against the commission in September 2014 at a local court in Shenzhen, and appealed to the high court of Guangdong after the first trial ended with a ruling for the commission’s decision, China Youth Daily reported.

The Guangdong high court opened trial on Tuesday to hear the case.

The company became notorious in April 2014 when it was raided by local police for suspected streaming of pornography.

Four of the company’s executives were prosecuted in January. According to prosecutors at a Beijing court, some 70 percent of 29,841 videos stored on its servers were allegedly found to contain pornographic material. However, the executives denied the accusations, Global Times reported.

The prosecutors had recommended a ten-year sentence for Wang Xin, the company’s CEO, but a final ruling is yet to be released.