New Chinese law finds Yahoo in copyright violation

Chinese courts handed the world's recording industry a significant victory Thursday, finding the search giant's Chinese music service was committing copyright infringement.

Under new laws passed by the country last year, a Beijing court found that Yahoo China violated copyright by allowing users to search, download, and play pirated music from its Web site.

While the company had previously been found guilty of infringement, it had appealed the ruling. This judgment effectively ends Yahoo's efforts to defend itself against such charges, and essentially makes it and other services who "deep link" in the country liable.

The IFPI says that such practice hurts the record industry's efforts to deal with the huge problem of piracy in China. The organization estimates that about 99 percent of downloaded music in the country is pirated, with services like Baidu and Yahoo China exacerbating the problem.

Baidu escaped any charges, as the company's alleged infringement happened before the new law went into effect. Thus the court ruled for Baidu even though it found it was assisting in copyright infringement.

IFPI officials warned however that it would go after Baidu anew under the new laws and that it was confident it would prevail.

"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," IFPI chairman and CEO John Kennedy said.

Neither Yahoo China nor Baidu were available for comment at press time.