Baidu and IP Equilibrium in China

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This story is a couple days old at this point, but I wanted to get a brief comment out there since it relates to something I’ve been referring to as an equilibrium state of IP infringement. My basic point is that some level of online infringement, particularly among smaller sites, is simply going to be tolerated, with the enforcement authorities focused on the larger players in the long term.

Anyway, here’s the latest from Beijing on deep linking of MP3 files:

China’s most popular search engine has had its wrist slapped by Beijing officials for allegedly providing illegal music downloads via its MP3 service.

According to a report on Xinhua, which is China’s state-run news agency, 14 websites will be “punished”, after ignoring repeated warnings to remove links to files that the Chinese government said should be taken offline.

It singled out the Baidu MP3 site but didn’t name any of the 13 other websites in the report.

Baidu said it would respond by removing the links to the files highlighted by the Chinese government.

“We are aware that songs require approval and have sought to comply with previous notifications from the ministry of culture. But search engine indexing is a continuous process and some files may have reappeared in results,” a spokesman for the company told Reuters.

Interesting timing, for two reasons. First, Baidu has been cleaning up its act recently, with well-publicized negotiations with Chinese writers (that might be a good or bad thing, depending on your view of Baidu) and its recent announcement of the Baidu Ting licensed music service.

Second, the US this year named Baidu as a notorious market for IP infringement. Several government sources, or quasi-government sources, came out at the time to say that the US government approach of naming names wasn’t very helpful. Strange that Beijing would soon thereafter add Baidu to its own list of infringers.

But back to my main point. Despite the fact that sites like Baidu, Taobao, Youku and others have made great strides in stopping IP infringement, it’s simply impossible for search engines, B2C and C2C sites, and file sharing platforms to completely halt such activities. There’s simply too much volume and too much user-generated content for total policing of everything.

That’s what the safe harbor approach is all about. Operator liability has to be realistic, and as long as adequate notice and takedown procedures exist and are implemented, then some leeway will be given to operators.

The Net is too big, and there’s too much data for total enforcement. Maybe some day in the future, we’ll have a bot-driven effort, but for now, the AI isn’t good enough to always distinguish between infringing and non-infringing files, or whether goods for sale are counterfeit.

In the meantime, we’ll not only have to let some IP infringement slide with respect to small sites with minimal traffic, but also with low levels of infringement at heavily-trafficked sites like Baidu and Taobao, provided of course that safe harbor provisions are adhered to.

And until we reach a stable equilibrium, I would not be surprised to see Beijing slap the wrist of site operators on an occasional basis just to remind everyone that they’re watching.