IFPI Welcomes Yahoo! China Ruling

by Mary Swire, for LawAndTax-News.com, Hong Kong

31 December 2007

The International Federation for the Phonographic Industry (IFPI) has hailed the delivery of a ruling against Yahoo! China over its music delivery service.

IFPI filed 11 separate claims for an injunction and damages against Yahoo! China on behalf of local and international record companies in January 2007, after the service walked away from talks regarding its alleged infringement of the record companies’ rights.

The cases were brought on behalf of EMI Group Hong Kong Limited, EMI Records Limited, EMI Taiwan Limited, Go East Limited, Mercury Records Limited, Sony BMG Music Entertainment (Taiwan) Limited, Sony BMG Music Entertainment , Universal International Music B.V, Universal Music Limited, Warner Music Hong Kong Limited and WEA International Inc.

Yahoo! China was alleged to have infringed IFPI member companies’ rights on a major scale by making available copyrighted songs for download through its service without any permission from the record companies.

Specifically, Yahoo! China, through its mp3 search page, offered a music delivery service that induces and facilitates users to search for individual mp3 music tracks, and then download and/or play them for free without ever leaving Yahoo! China's website.

The decision made by the Beijing court earlier this month was delivered under the auspices of new Chinese copyright laws which entered into force in 2006. The Court separately ruled on a similar case against internet company, Baidu which had been brought under the previous Chinese copyright laws.

The ruling confirmed that Baidu had participated with and assisted third party sites in transmitting infringing music, but found that under the old laws, Baidu was not liable for copyright infringement.

According to the IFPI, music search services such as Yahoo China’s and Baidu’s, which “deep link” users to hundreds of thousands of pirate tracks, are a huge drain on efforts to develop a legitimate music market in China. Despite enormous market potential, music sales in China totalled US$76 million in 2006, less than one per cent of the global recorded music market.

John Kennedy, Chairman and CEO of IFPI, announced that:

“The ruling against Yahoo China is extremely significant in clarifying copyright rules for internet music services in China."

“By confirming that Yahoo China’s service violates copyright under new Chinese laws, the Beijing Court has effectively set the standard for internet companies throughout the country."

He went on to add that:

“We are disappointed that the court did not find Baidu liable, but that judgment was about Baidu’s actions in the past under an old law that is no longer in force. The judgment is irrelevant since it has effectively been superseded by the Yahoo China ruling. Baidu should now prepare to have its actions judged under the new law. We are confident a court would hold Baidu liable as it has Yahoo China."

“China could be a fantastic digital music market if internet companies like Yahoo China, and their owners, commit themselves to respecting copyright and protecting creators and producers."

Mr Kennedy concluded:

“Our member companies seek partnership, not conflict, with China’s internet companies – but that partnership has to be based on proper respect for intellectual property rights. What is deeply regrettable is that Yahoo China repeatedly walked away from the chance to pioneer a legitimate music service in partnership with record companies and instead chose to engage in lengthy and needless litigation.”

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