Beijing Court Finds Search Engine Baidu Guilty of Copyright Infringement

Baidu CEO Robin Li

The company was ordered to pay video streaming website Youku Tudou $78,560 in damages for illegally hosting 18 Chinese TV shows.

China's top search engine Baidu was found guilty of copyright infringement and ordered to pay $78,560 (491,000 yuan) in damages to the country's leading video streaming website, Youku Tudou, for illegally hosting 18 Chinese TV shows for which Youku owned exclusive rights to broadcast online.

The ruling against Baidu is part of a group lawsuit being brought by Youku Tudou, Sohu Video, Tencent Video, LeTV, the MPAA, CODA, Wanda Films, Enlight Media and LeTV Films.

The group is seeking $49 million in damages from Baidu and QVOD, accusing them of disseminating more than 10,000 copyrighted videos and engaging in hotlinking.

"We welcome the findings," said a Youku Tudou spokesperson. "This is the first time in China that such business model is judged definitely as infringement. We call on Baidu to respect copyright and help build a virtuous online video ecosystem in China."

In a statement, Baidu said that the Haidian District People's Court had not supported the "hyped" litigation seeking millions of dollars in damages.

"Baidu Video is committed to technological innovation and enhancing users' experience in searching and watching," the statement said.

"We are willing to discuss with all parties and build a benign cooperation format that benefits internet users and the industry," Baidu said. "Currently, we have reached cooperation deals with many copyright owners to provide more genuine online video resources. In the future, we will continue to contribute in creating a benign Internet environment."

The online content distribution market in China is of interest to Hollywood, as it wants a platform and a revenue stream for legitimate content online in the face of rampant piracy.

China is the world's largest Internet market, with 591 million users, and in the last year the number of people who surf the web from smartphones and tablets rose by 20 percent. This year, China's mobile Internet market will reach 648 million users.