Chinese Film, Internet Video Companies Sue Search Giant Baidu in Anti-Piracy Push

Dalian Wanda Group, Youku Tudou and others seek $49 million in damages from Baidu and a smaller search engine in litigation announced at a Beijing press event attended by reps from the MPAA and Hollywood studios. 

The MPAA and China's top online video sites announced on Wednesday that they have linked up for a major anti-piracy push in China.

The Chinese players are simultaneously filing lawsuits against the country's leading search engine, Baidu, and smaller rival QVOD, accusing them of spreading pirated videos and engaging in "hot-linking" to unlicensed content. Collectively, the suits are estimated to seek $49 million in damages. 

Youku Tudou, Sohu Video, Tencent Video, LeTV, the Motion Picture Association of America (MPAA), CODA, Wanda Films, Enlight Media and Letv Films announced the joint action at a press conference in Beijing. 

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Along with the MPAA, Hollywood attendees at the announcement included the China heads of Sony Pictures Entertainment, Warner Brothers, Disney and Paramount. 

The various parties are suing Baidu and QVOD independently. A spokesperson for Youku Toudu, China's largest online video firm, told The Hollywood Reporter that the company had already filed suit against Baidu in Beijing's Haidian People's Court and in Shanghai. The firm has collected evidence of individual incidences of infringement and is taking legal action in the municipalities where the incidents occurred.

The suits being brought by the various other parties are said to be following the same course, with some suits already filed and others yet to come. 

The success of China's online content distributors is of serious interest to Hollywood as it looks to build on the opportunities offered by the country's booming online video market. Hollywood companies are seeking new platforms and revenue streams for legitimate content online in the face of rampant piracy.

The plaintiffs combined the announcement of the lawsuit with a joint declaration to fight Internet piracy on computers and mobile devices in China. and own China's largest platform for user-generated content (UGC). Smartphones and tablets are fueling the fast growth of UGC.

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.

William Feng, the MPAA's China president, gave a statement at the event in Beijing, saying that a large number of Chinese and foreign films and TV productions are distributed on rogue video sites that are built using light content management systems.

"We must increase efforts to stop companies from infringing copyrighted material and to pay for the damages for the loss of copyright," he said.

Speaking from the perspective of China's online distributors, Sohu chairman and CEO Charles Zhang said: "Since 2009, the video industry is facing a more severe anti-piracy situation." 

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He added: "We cannot keep competing because where thieves and robbers are having their way, law-abiding companies cannot survive. We may even have to exit the online video industry if such practices continue. Nobody will invest in content, and China’s online video industry will face the sad situation as the music industry, which has already been destroyed by piracy, had faced before."

In a statement, the MPAA also said: "Urgent action is needed to prevent large scale online infringement of film and television content in China.”

Youku Tudou chairman and CEO Victor Koo said mainstream video sites had managed to establish a healthy eco-system through competition and collaboration, including a focus on respecting intellectual property.

"We hope more people can join in, and together, with government, authorities and copyright holders, [we hope] to strengthen cooperation, enhance technical measures, fight against hotlink[ing], combat piracy and jointly promote the process of genuine network[ing]," Koo said.

"To be able to provide high-quality content to the end user, major, legitimate video sites have made a huge investment, and respecting copyright is one of the most important investments,” said Liu Shengyi of Tencent Network Media Business. "Any investment to circumvent copyright and other content shortcuts cannot be accepted as legal and ethnical."

Liu said Tencent had already completed the bulk of notary acts for its evidence of hotlinking and had filed lawsuits against QVOD and "retained Baidu video rights to take legal action."

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Meanwhile, LeTV COO Liu Hong said that online infringement was growing explosively. "On search engines you will find the first few ranked pages are sites containing pirated material," he said. "Infringement and piracy to the copyright holder causes significant damage."

Baidu issued a statement late on Wednesday, outlining the various technical measures it has introduced to combat the piracy of online video content, saying the company "has always attached great importance to copyright protection issues in the video industry."

It said that since June, Baidu-based products had blocked or banned over 5.8 million links to pirated video content.

The statement went on: "Piracy is a common problem of the domestic video industry. Baidu will continue to step up its efforts to support the development of the legitimate video content industry. We also hope to work together with our industry partners to promote the development of the legitimate video industry through technical innovation, and we welcome community supervision."