WTF? Baidu Wins MP3 Deep Linking Case

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It’s been a good couple of weeks for Baidu, hasn’t it?

This post might turn into a lengthy rehash of some old litigation and copyright law issues, so let me start off with the newest development here. Baidu was sued by several large music companies and their industry group, the IFPI. The claim was that Baidu (and Sohu, which was also a defendant) was guilty of copyright infringement due to its “deep linking” to MP3 files — direct hyperlinks to illegal content.

Everyone expected Baidu to lose this case, myself included. This is a big surprise and doesn’t make much sense given the state of the law and previous decisions in this area.

OK, let’s unpack this a bit so I can explain just exactly why this is so messed up. First, a timeline of sorts to explain how we got here:

  1. January 1, 2006 — China’s Internet regulations dealing with online copyright infringement are passed. This establishes a framework for dealing with these types of cases and adopts a “Notice and Takedown” approach for assessing ISP/search engine liability.
  2. November 2006 — Baidu wins first infringement case filed against it by the music industry. Beijing 1st Intermediate Court does not rule on copyright issue under new law, as the case was filed before the new law took effect (relates to acts that occurred prior to the new law).
  3. December 2007 — Yahoo loses MP3 deep linking case similar to the one filed against Baidu. The two cases are distinguished by timing, as the new Internet regulations were applied under this second litigation. The music industry expects to win a refiled case against Baidu under the new law.
  4. February 2008 — music industry files new case against Baidu et al.
  5. January 2010 — Beijing 1st Intermediate Court again rules in favor of Baidu.

The usual disclaimer should apply here. I have not seen the judgment and therefore it is possible that the facts or legal analysis explain why Yahoo and Baidu ended up with different results. I can’t imagine what that would be, but it is always possible. For example, the court could have found that Baidu had established an adequate Notice and Takedown policy, insulating itself from liability. There is absolutely no evidence that this is what happened, though, and in fact the little information on the ruling we do have suggests some other basis for the judgement.

I believe it is fair to say that the alleged infringement in the two cases are fairly similar. That is, each defendant hosts a music search feature on its site. Users may search by name for the song they want, and search results include “deep links” that are direct hyperlinks to the infringing MP3 files.

The applicable law here is several years old, and the notion of liability and “Notice and Takedown” has been dealt with many times now by courts, Supreme People’s Court commentary, and scholars in the field. I have talked about this many times on this blog with respect to video file sharing sites and pending litigation. The key issue was explained in a People’s Daily summary of the new law at the time:

[T]he new regulation stipulates that Internet service providers which merely offer search services and links are not liable for links to pirated content if they delete the links after being informed by the copyright owners. If the search engines continue to provide links to pirated content, they take on the infringement responsibility along with the pirate websites.

The result in the first Baidu case made some sense, I suppose, since the new law was not yet applicable. The subsequent Yahoo loss was therefore seen by industry as an important step forward, having a Beijing court recognize that MP3 deep linking was indeed an infringement under the Internet regulations, provided of course that an adequate Notice and Takedown system had not been put into place.

The confidence that the music industry had after the Yahoo decision was, I thought at the time, quite well placed. Here is what the IFPI had to say:

We are disappointed that the court did not find Baidu liable, but that judgment was about Baiduís actions in the past under an old law that is no longer in force. The judgment is irrelevant since it has effectively been superseded by the Yahoo! China ruling. Baidu should now prepare to have its actions judged under the new law. We are confident a court would hold Baidu liable as it has Yahoo! China.

I could be incorrect, but for purposes of determining copyright infringement, I do not believe that the music search platforms of Yahoo and Baidu are significantly distinct. Actually, we have no way of knowing (without a copy of the judgment) whether the author of the ruling even attempted to distinguish Baidu’s situation from that of Yahoo.

Keep in mind that there is no Common Law style system of stare decisis, binding legal precedent, in China. The Yahoo case was heard in the Beijing 2nd Intermediate Court, while the Baidu case was at the Beijing 1st Intermediate Court. The second court was not bound at all by the Yahoo ruling.

That being said, the 2006 law is fairly clear and the Yahoo case is very widely known. The Baidu court was undoubtedly aware of the Yahoo decision and chose to either disagree with the legal analysis of that case, distinguish the two sets of facts from each other, or rule on the basis of a technical defect. As I stated above, it seems like the facts of Baidu and Yahoo are quite similar.

As far as the legal reasoning is concerned, there is little information to go on. This statement by the court, as reported by JLM, is very interesting:

According to a court statement, providing search results does not contravene copyright law, the report said.

That’s just bizarre. Sure, you could say that under the 2006 Internet regulations, providing search results may not always contravene copyright law. That would be accurate.

But the whole point of the “Notice and Takedown” approach is to explain under what circumstances liability attaches and when it does not. There are indeed instances where copyright violations do occur with search — that is what the Yahoo case was all about.

And let’s not forget, we are not dealing with a simple search result here. We are talking about deep linking, direct paths to illegal content. This necessitates a slightly different analysis than with basic search results.

The court’s second comment is even more odd:

The case against Baidu fell through because the plaintiffs failed to identify sites hosting unauthorized music downloads, the report said quoting lawyer Sun Yan.

????? Does not compute. First, I don’t understand what that means and why that would be an issue in contention. Second, even if it does explain the result, it would be a technical defect that had nothing to do with the underlying copyright claim. The second sentence therefore contradicts the first one. Very weird.

I shouldn’t pay too much attention to translated comments from court officials who may not know anything of substance. Unfortunately that’s all I have to go on at this point. The good news is that since the case was heard in Beijing, I can probably get a friend to obtain a copy of the ruling — might take a while though.

To sum up, I am trying hard not to be overly critical. I do not have all the details, so whatever I say might be based on very faulty assumptions. However, if my assumption about the similarity of Baidu’s and Yahoo’s music search platforms is accurate, and if my take on the 2006 Internet regulations is correct, it is difficult to see why we have divergent rulings here.

I have no doubt that speculation about this judgement will focus on the nationality of the two defendants and will raise the issue of protectionism. There is no evidence that would lead one to suspect this, but until we get a better idea of the court’s legal analysis, questions will remain as to why we have seemingly contradictory results.

3 responses on “WTF? Baidu Wins MP3 Deep Linking Case

  1. luckylulu

    I can’t wait to read the judgment on this case. They may have ruled on a technicality or lack of evidency issue. Or they have decided that the court judgment was not essential -as new regulations and policies are being implemented to reign in activities on the Internet.