Major Labels Sue Chinese Search Sites Over MP3 "Deep Links"

Authored by Mark Hefflinger on February 5, 2008 - 9:54am.

Beijing - Three of the major record labels have launched new copyright infringement lawsuits against Chinese search providers Baidu (NASD: BIDU), Sohu.com and Yahoo China (NASD: YHOO), following what record label trade group the International Federation of the Phonographic Industry (IFPI) called "months of fruitless negotiations." Universal Music Group, Sony BMG Music Entertainment (Hong Kong) (NYSE: SNE), and Warner Music Hong Kong (NYSE: WMG) filed claims in a Beijing court asking the search firms to remove links to unauthorized music files hosted on third-party sites.

The lawsuits follow a previous unsuccessful attempt by U.S. labels to win a guilty verdict against Baidu, China's leading search engine.

While Baidu was not found liable for copyright infringement in that case, the IFPI says the new charges are being filed after new, stronger intellectual property laws took effect in China -- laws which resulted in a court finding Yahoo China liable for copyright infringement in December.

The new charges against Yahoo China stem from what the IFPI says is the company's refusal to comply with the December ruling to remove "deep links" to unauthorized music files.

"China's internet companies have a unique opportunity to demonstrate respect for copyright, take a stand against piracy and engage in responsible partnership with music companies," said IFPI chairman and CEO John Kennedy.

"It's a matter of great regret that, despite the clear precedent laid down by the Yahoo China judgment, those internet companies are instead choosing blatant violation of copyright, with the inevitable and unwanted litigation that follows in its wake."