Last week's Beijing verdict against web portal Sohu.com for offering illegal downloading of pirated movies has encouraged observers to believe that China is getting serious about on-line intellectual property protection.
Beijing First Intermediate People's Court ordered Sohu's subsidiary Beijing Sohu Internet Information Service Company, to pay damages of RMB1.08m yuan (US$140,000) to five movie companies and publish an acknowledgement of its infringement.
The Motion Picture Association brought the lawsuit on behalf of Fox Movies, Warner Bros, Sony Pictures, New Line Cinema and Universal City Studios and the ten movies which were offered for download included The Day After Tomorrow, The Lord of the Rings, Ocean's Eleven and Harry Potter III.
Sohu has also been ordered to remove the movie download area from its websites. Currently it offers more than 100 movies for download under a subscription service.
The company can appeal the verdict if it wishes.
The US, the EU and various international bodies have persistently complained to China that it is doing too little to rein in widespread IP infringement.
In November, EU Trade Commissioner, Peter Mandelson suggested on a visit to China that a failure to address IP problems could affect fledgling Chinese industries. Commenting after a meeting with State Intellectual Property Office officials, Mr Mandelson revealed that piracy is "the biggest problem for companies trying to do business here", revealing that over half of all counterfeit goods stopped at European borders last year originated in China.
He went on to add that:
"Tolerating intellectual property theft is a dead end for China. If China continues to look the other way, this will come back and bite the Chinese."
He welcomed efforts by the Chinese authorities to address this issue, including the establishment of IPR complaint centres to assist aggrieved foreign businesses, stating that:
"Europe and China have established a good dialogue and cooperation on IPR matters and I do not want to do anything to undermine or weaken that relationship."
However, he called for strong action from the State authorities, especially with regard to the payment of royalties on European technology patents.
"I would like to see a strong public declaration by the Chinese government that they want to see the appropriate royalty payments being made in the future, without turning a blind eye to their non-payment as has been the case in the past," he announced, according to reports.
In June, the Beijing authorities announced that they were planning to use the latest online technology to authenticate, monitor and protect intellectual property rights on the Internet.
The technology reportedly inludes a software copyright authentication platform and an improved Internet copyright monitoring system.
Speaking to Xinhua, Wang Ziqiang, spokesman for the National Copyright Administration of China revealed that the use of such measures to prevent copyright infringement and piracy on the Internet was increasing.
In addition, a new regulation concerning copyright protection was enacted, according to the report. Under the new regulation, which came into force on July 1, those seeking to upload texts, performance, or sound and video recordings to the Internet for downloading, copying or other use, must first acquire the permission of the copyright owners and pay the required fee. It's this regulation that was used by the MPA to pursue Sohu.com.
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