Warner Corp. (Complainant) stated that it holds the copyright to produce the 41 songs at issue, including the song “the Call of Love,” by Aaron Kwok (from the album “AK Trilogy: Yours Truly Greatest Hits”). Without permission Baidu (Respondent) provided a large number of links to music infringing these audio files, as well as pre-listening and downloading services by through its “MP3 Service” search boxes, music charts, featured music, Music Master and Music Box on its website http://www.baidu.com. The complaint also included the respondent’s subordinate websites, including, but not limited to, http://mp3.baidu.com and http://zhangmen.baidu.com.

 

Therefore, according to the complainant, the acts of the respondent constituted an infringement upon the right of information network dissemination of the complainant. The specific reasons were as follows: 1. By providing the searching, pre-listening, and downloading services through its MP3 Service, the respondent created the facilities and convenience for wide transmission of infringing audio files and in objective terms, participated in transmitting and helping transmitting the same on the Internet; 2. The respondent knew, or should have known, and was able to know that the MP3 Service offered links to infringing audio files, but actively participated in transmitting and helping transmit the same on the Internet. The respondent was intentionally at fault. In addition, after several warnings from the complainant to stop the infringement, the respondent failed to take corresponding measures to stop transmitting those infringing audio files.

 

In summary, the complainant moved the court to order the respondent to: 1) immediately and permanently stop all infringement activities, either individually or in combination with others, related to property to which the complainant enjoys any rights, including but not limited to the right of reproduction and the right of information network dissemination; 2) publish a statement on its websites and on the Legal Daily, to eliminate the ill effects of the respondent’s infringement and make a public apology to the complainant; and 3) compensate the complainant for all financial losses and pay all reasonable legal expenses that the complainant has sustained as a result of the respondent’s actions. The total damages sought by the complainant totaled 20.5 million Yuan.

 

The respondent argued as follows. 1) The respondent provides a search service of audio files other than, “the express music delivery service,” as the complainant calls it. This special search service and other special search services make up the Information Locator Service (ILS) of the respondent. The complainant mischaracterizes these special search services. As one of the special search service, the MP3 Search works as a common webpage search. The ability to search the music charts by category is an important part of the search engine. 2) The respondent has never acted to “lure, solicit or help” any infringement. It was in no way able to know or should have known of the alleged infringement which occurred by generating links to those audio files. 3) The complainant is not entitled in any way to require the respondent to screen out the information that the complainant provides. To sum up, the respondent stated that the complainant failed to make any claim based on fact or law; the respondent has never performed, conducted, abetted or helped others to perform or conduct any act that may have damaged the rights of the complainant. Consequently the respondent is not at fault because it did not know or should not have known of the alleged infringement in any way. Therefore, the respondent asked the Court to disaffirm all the claims of the complainant.

 

At trial the Court found that the copyright verification reports proved that the complainant held the audio copyrights for the 41 songs concerned.

 

On January 16, 2008, the complainant authorized a lawyer to send, by the express mail service, a Notification of Continuing Infringement to the respondent. In appendix 3 of the notification was a photocopy of the copyright verification report produced by the Asian Regional Office of the International Federation of the Phonographic Industry (IFPI), which contained 28 songs to which the complainant enjoys copyrights, as well as their names, singers and albums. Appendix 4 gave some examples on the alleged infringement, including the names of certain songs, their singers and specific URLs.

 

In support of the allegations of infringement, the complainant provided a certificate issued by a notary public stating that by using the music charts search engine provided by the respondent, the complainant was able to key in the names of the songs, click on the results to pre-listen to the songs and then download the music files. After the test, with very few exceptions, the songs which were downloaded, with the notary’s approval, were the same audio files named in the complaint.

 

The Court disaffirmed the claims of the complainant, in accordance with Articles 10.1.12 and 41.1 of the Copyright Law of the People’s Republic of China, and Articles 14 and 23 of the Regulations on Protection of the Right of Information Network Dissemination.

 

This case is a typical case outlining the circumstances under which a search engine provider (SEP) should be held liable for contributory infringement. There have been many similar cases since 2005. In handling these cases, the courts in Beijing have reached a consensus on a few issues. One issue of consensus is the “server” test, in which an Internet Service Provider (ISP) will be held liable for direct infringement. Another is the “fault” rule, where an ISP will be held liable for civil damages. In all other cases, if the respondent is not at fault for the alleged infringement, and if the infringement is found to be occurring, the respondent will be held only liable to stop the infringement under civil law.  

 

These lawsuits may be brought up by a record label, for instance the audio copyright holder, in accordance with the following:

 

1. Article 10.1.12 of the Copyright Law (as amended in 2010, the same below), where the “right of information network dissemination” means the right to provide a work to the public by wired or wireless means, so that the public may get such work at the time/date and place that they choose individually;

 

2. Article 42 of the Copyright Law, where the producer of audio/visual fixations has the right to permit and be compensated for the permission for others to copy, distribute, lease or disseminate to the public on the information network such audio/visual fixations it produces;

 

3. Article 23 of the Regulations on Protection of the Right of Information Network Dissemination (“Regulations”), where, if an ISP that provides search or link services to the subject user has disconnected its links to infringing works, performances, or audio/visual fixations upon notification from a holder of rights to such works, performances, or audio/visual fixations, then the ISP will not be held liable for damages; however, if the ISP knows or should have known that the works, performances or audio/visual fixations it links are infringing, then the ISP should be held liable for joint infringement.

 

4. Article 148.1 of the Opinions of the Supreme People’s Court on Several Issues in Implementing the General Principles of the Civil Law of the People’s Republic of China (Provisional), where anyone which solicits or helps any other in doing any act of tort should be the joint tortfeasor and held liable, jointly and severally, for such act of tort under civil law.

 

To determine whether the respondent should be held liable for damages or other civil liabilities, we should first determine whether the respondent is intentionally at fault. To determine whether the respondent is acting intentionally, we should first determine what due diligence obligations are on the respondent; that is, the “knew-or-should-have-known” test should be understood as defined under the saving clause of Article 23 of the Regulations. This is a precondition for the case to be tried correctly. In this respect, this author believes that at least two conditions are required for an ISP to know that it links infringing songs. First, the ISP knows which link or links are infringing; and second, the ISP knows whose rights are damaged by these infringing links. Also, at least two conditions must be met to decide that an ISP should have known that it links infringing songs. First, the ISP should have known which song or songs it links are infringing by using prior technical means; and second, the ISP knows whose rights are damaged by these infringing links.

 

In this case, the complainant, as the producer of the audio files concerned, holds that the respondent had infringed upon its right of information network dissemination on the grounds that: a) the respondent configured search boxes and music charts for Internet users to pre-listen to or download online the infringing songs that the respondent links, before the complainant sent the Notification of Continuing Infringement; and b) the respondent continued providing search boxes and music charts for Internet users to pre-listen to or download online the infringing songs after the Notification of Continuing Infringement was given. For these two acts, the Court reasoned as follows:

 

1. Did the respondent infringe upon the rights of the complainant by providing links through search boxes and music charts for Internet users to pre-listen to or download the infringing songs, before the Notification of Continuing Infringement was given?

 

First, the content provided by use of the respondent’s search engine may lead to infringing information, information in the public domain or non-infringing content that the holder of the rights is permitted by law to provide. The respondent cannot determine what key words will be keyed in or what services will be required by an Internet user in advance of the search. Thus, merely providing the search box where the Internet user may key in words and search for songs does not demonstrate that the respondent knew or should have known that the search engine would lead the Internet user to links that infringe on copyrights. The claim that the respondent infringes upon the audio copyrights lacks a factual basis and is disaffirmed where the complainant asserts that providing the search box results in a violation.

 

Second, regarding the configuration of music charts which an Internet user may use to pre-listen to or download online the infringing songs that the respondent links, the Court stated that from the findings of fact, these music charts, such as the “Golden Movie Songs” or “Top 100 Songs,” are only categorizations of the information of the songs. They are irrelevant to who produce those songs. When an Internet user goes into any one of these music charts and clicks on the keyword of any singer or song that the respondent configures, the search program searches online in real time, as if a search box were used. After the search is done, the keyword the Internet user has just clicked on is shown in the search box on the webpage of the search results. Thus, despite the music charts, the respondent is still unable to know exactly what the search results will be. That is, it cannot know whether the songs to which those search results are linked have infringed upon the rights of the complainant. Therefore, the provision of the music charts does not demonstrate that the respondent knew or should have known that the songs it links are infringing. The complainant’s claim that the respondent infringes upon the ownership rights on account of the provision of the music charts lacks a factual basis and is disaffirmed.  

 

2. Has the respondent infringed upon the rights of the complainant by continuing to provide the search boxes and music charts for Internet users to pre-listen to or download online the infringing songs that the respondent links, after the Notification of Continuing Infringement was given?  

 

 

Article 14 provides that if the holder of rights believes that its right of information network dissemination is damaged by, or its right management information in an electronic format is deleted or revised for, any work, performance, or audio/visual fixation concerned with the service of an ISP which provides a storage space of information, or search or link services., then this rights holder may send a notice in writing to the ISP, requesting the latter to delete or disconnect with such work, performance, or audio/visual fixation. This notice shall include (a) the name, contact and address of the rights holder; (b) the name (or names) and network address (or addresses) of the infringing work, performance, or audio/visual fixation to be deleted or disconnected with and (c) preliminary evidential materials for constitution of the infringement. The rights holder shall be responsible for the truthfulness of the notice.

 

In this section, the “notice in writing” should include the name and network address (i.e. the URL) of the song links required to be disconnected with. The “preliminary evidential materials for constitution of the infringement” should include preliminary title evidence and preliminary infringement evidence. The preliminary title evidence means the Statement signed by the Regional Director of the IFPI Asian Regional Office and the copyright verification report of the claimed songs. The preliminary infringement evidence means the URLs of the songs attached to the singed copyright verification report.

 

If the notification that the rights holder gives includes both the copyright verification report of the claimed songs and the URLs of the infringing songs that the alleged infringer links, then this notification meets the standards of a “notice in writing” under Article 14. If the alleged infringer does not disconnect with the infringing songs upon the notification, then it will be deemed as knowing of those infringing songs and should be held jointly liable for the infringement.

 

In the event the rights holder provides only the copyright verification report that contains the names of the songs, and their singers and albums, but fails to note the URLs of the infringing songs, and on this basis, claims for its rights, the Court reasoned first that it is possible that a single song may be sung by different singers or by the same singer in a different recording environments and thus, at least the name of the song, singer and album should be known before an infringing song link may be. Second, evidence showed the webpage links provided by the respondent’s search engine included information such as, the name of the song, the name of the singer, the name of the album, the pre-listening function, the downloading function, the lyrics, and the linking speed. Since the respondent was able to locate the name of the song, the name of the singer and the name of the album using the surrounding information on the searched webpage, then this information could have been used to locate the song and its rights holder and the respondent was fully capable of screening out possibly infringing songs using these elements. Thus, if the copyright verification report includes the names of the songs, the names of the singers, and the names of the albums, then it can prove that the SEP can conclude whether the link is an infringement or not.

 

In this case, the complainant stated that it sent the respondent four warnings of continuing infringement. The first three, however, did not include evidential materials on the rights of the complainant related to the songs so noticed. Thus, the respondent did not know or should have known whose rights had been damaged. Thus, the first three warning notices were insufficient to prove that the respondent knew or should have known about the infringing song links. On January 16, 2008, the fourth warning of continuing infringement was sent, which included an authorization of Warner Corp. on the copyright/neighboring right dispute with Baidu Inc.; a Statement from Leong May Seey, the Regional Director of the IFPI Asian Regional Office; and the copyright verification report on the 28 songs involved, including the names of these songs, their singers and albums, and exemplary infringing URLs. Thus, with this last notification, the respondent had been notified of the names of some of the 41 songs involved, their singers and albums, and some their of Internet addresses.

 

As stated, if all the above conditions are satisfied, the court may conclude that the respondent knows about the infringing links to those songs concerned.

 

Moreover, if all the conditions below are satisfied, the court may conclude that the respondent should have known about the infringing links to those songs concerned.

 

a. Those songs are claimed by the complainant for its audio copyrighted material;

 

b. The names of the songs, and their singers and albums are included in the copyright verification report as an appendix to the last warning of continuing infringement; and

 

c. The songs that the complainant searched using the search boxes or music charts and downloaded have the same audio source, and the same song name, singer name and album name as the songs that the complainant claims for its copyright.

 

Moreover, as the songs listed in the copyright verification report in the last warning are fewer than the songs that the complainant claims under copyright, then as stated above, it may be concluded that the respondent does not know or should not have known that the songs not appearing in the copyright verification report, which the respondent links through the search box or the music charts, infringe upon the rights of the complainant; i.e. the complainant cannot seek damages for any song not mentioned in the letter.

 

(2) Whether the respondent has infringed upon the right of information network dissemination that the complainant holds as the phonogram producer.

 

The songs listed in the copyright verification report and the songs for which the specific URLs were notified in the fourth warning, their URLs, names, singers and albums are not the same as the songs listed in the complainant’s notarizations that the complainant has made for the alleged infringement. They changed over time. Therefore, the claim that the respondent infringed upon the right of information network dissemination that the complainant enjoys as the audio producer, by continuing providing services, through the search box and music charts, for Internet users to pre-listen to or download online the songs concerned, after the Notification of Continuing Infringement, lacks the factual and legal basis and should be disaffirmed.

 

The other three cases brought by the record labels against Baidu Inc. are similar to the case here in terms of their circumstances and decisions. However, the four cases that the record labels initiated against Sohu Company and Sogou Company are different. In those cases, after the rights holders gave complying notices, Sougou Company did not delete or screen out the links to the songs notified, including their URLs, names, singers and albums. In addition, Sohu Company searches for songs by setting up links with Sougou Company, and relies on the search engine of the latter to complete the songs search function. Thus, the two companies knew about the actions of the other, they mutually acted to cooperated to produce the consequences of their actions. Therefore, the Court decided that they both shall be jointly liable for their actions and bear civil responsibilities to stop the infringement, eliminate the ill effects, and pay for the damages.