The legal battle between the Chinese search engine provider Baidu.com and the Shanghai-based record agency Push Sound is set to drag on after a first instance ruling by a district court in Beijing.

Baidu, the NASDAQ-listed firm, said yesterday that it would appeal to a higher court after the Haidian District Court ruled on Friday that Baidu infringed the copyrights of 34 songs belonging to Push Sound.

The court said Baidu should stop providing download links to the songs and pay 68,000 yuan (US$8,380) in compensation to Push Sound, which is related to the international record giant EMI.

In June, Shanghai-based Push Sound filed a lawsuit against Baidu, claiming Baidu offered a music download service for 46 songs on its website that harmed the interests of Push Sound in its distribution of music on the Internet.

Push Sound asked for 460,000 yuan (US$57,000) in compensation and demanded Baidu make a public apology in the Legal Daily newspaper.

Music downloading is one of the most popular services on the Internet, which accounts for about 20 percent of traffic for search engines like Baidu and Yisou under Yahoo!.

Liang Dong, vice-president and spokesman for the top Chinese search engine, insisted that it had not infringed the copyrights of Push Sound.

"We understand Push Sound's action against us, but it is targeting the wrong people," said Liang.

Baidu said it only provided links to other websites with the songs and did not offer downloading services itself so it should not be held legally responsible.

Baidu added that the ruling was the first instance so was not the final word. It will appeal to a higher court.

Baidu, a superstar on the NASDAQ last month when its initial public officering price rose by almost 400 percent on the first day, saw its stock price fall by 4 percent to US$78.35, when the ruling was announced.

Push Sound declined to make a comment on the case yesterday.

A professor in intellectual property right (IPR) law with Peking University believes Chinese Internet companies do not pay enough attention to IPR protection, but the ruling seemed to be too harsh for a search engine company.

"It is too much to put all the responsibility on Baidu," said the professor, who declined to be named.

She said that in some countries search engine providers could be sued if they direct their results to contents infringing others' copyrights, but in China there is no such rule.

However, search engine companies are held responsible if they know songs belong to certain copyright owners yet still provide them.

The plaintiff also needs to prove that search engine companies use the results for commercial purposes, so the professor suggests compensations of 2,000 yuan (US$247) per song may be too high.

She said the court should reach a balance between encouraging new technologies and protecting copyrights.

NetEase.com, another NASDAQ-listed Chinese Internet portal, stopped providing MP3 search services from August 15, saying that MP3 searching does not infringe the interests of copyright owners, but helps the real infringers.

(China Daily September 20, 2005)