By Li Mao in Shanghai and Liu Linlin in Beijing
A Shanghai district court has ordered search engine giant Baidu to pay half a million yuan ($75,700) in compensation to Shanda Literature, an original content provider website, in a major copyright lawsuit case.
The conviction is seen as a major boost for writers and publishers who claimed that Baidu, labeled by the Office of the US Trade Representative in February as a "notorious market" for pirated and counterfeit goods, has been a frequent violator of the copyrights of their works.
"As an Internet service provider, Baidu indirectly infringed on the copyrights of Shanda Literature as it did not remove unauthorized literary works from its website immediately after being informed by Shanda," according to the verdict handed down by Luwan District People's Court on Tuesday.
Shanda Literature is part of Shanghai-based Shanda Interactive Entertainment Limited, an interactive entertainment media company.
Baidu also provided unauthorized literary works on its search engine instead of directing Internet users to a third website, according to the verdict.
"The behavior is considered the same as copying and uploading. Therefore it directly violates the copyrights of Shanda Literature," court spokesperson Wu Yiheng told the Global Times on Wednesday.
Baidu said it will appeal to a higher court, the Xinhua News Agency reported.
The company refused to comment on Wednesday.
Speculation that Shanda is buying shares of online file-sharing website docin.com have been circulating online. If true, it would make Shanda a potential competitor of Baidu Wenku (Baidu Libary), according to hexun.com.
"Over 95 percent of famous novels in Shanda Literature can be found in Baidu Wenku, and all of them are accessible without any charge. This will result in roughly 1 billion yuan of economic losses for us," Shanda CEO Hou Xiaoqiang was quoted by sina.com as saying.
Shanda decided to sue Baidu in late 2009 and the case was filed at the Luwan District People's Court in 2010, Beijing Youth Daily reported.
You Minjian, an attorney representing Shanda, told the Global Times on Wednesday, "The losses of Shanda Literature resulting from Baidu's copyright violations were immense. Economic compensation alone can hardly solve the problem. Yet the ruling is quite satisfactory as it showed the commitment of authorities to copyright protection."
Zhang Hongbo, deputy director-general of the China Written Works Copyright Society, told Beijing Youth Daily that this verdict is the first major victory for the publishing industry against Baidu, which is said to be involved in other copyright controversies.
Baidu's mp3 search service, which provides links to free but frequently pirated music downloads, has drawn fire from the recording industry.
According to China's Copyright Law, violators have to pay the amount of money equal to losses suffered by the copyright owner due to the infringement, or the amount of profits gained by the offender through illegal actions, with a maximum of 500,000 yuan.
In March, 50 Chinese writers published an open letter accusing Baidu of stealing their works and demanding that the search engine giant stop its copyright infringement.
Shen Haobo, president of Beijing Motie Books, one of the representatives of the coalition, told the Global Times on Wednesday that the court ruling marked a good start for writers and publishers who were fighting for their rights.
"It's a positive signal from the judiciary. Shanda's victory proved that we should trust law enforcement as it will bring about effective solutions in tackling copyright infringement. It is encouraging and I'm considering filing my lawsuit against Baidu," Shen said.
Cheng Sanguo, chief consultant of Bookdao New Publishing Institute, voiced concerns that a lack of (intellectual property rights) IPR protection would victimize everyone.
"The mainstream publishers seem to be reluctant to trust digital publishers and are unwilling to provide their best resources to Internet platforms," he told sohu.com.
The tricky relationship between publishers and Internet platforms contributed to the scarcity of good quality authorized online publications, he said.
Kong Xiangjun, vice president of the IPR Tribunal of the Supreme People's Court, told Beijing News that copyright-related cases make up half of the total cases, while Internet copyright infringement account for half of copyright cases.
"Courts will balance IPR protection, Internet technology development and the right to information of Web users to secure fair verdicts," Kong said.
Zhu Shanshan contributed to this story