Yahoo! Inc challenged over intellectual property rights abuse in China

• American corporate icon is investing in and profiting from mass copyright infringement

Beijing, 13th November 2007

The international music industry is challenging one of the world’s best-known internet companies, Yahoo! Inc, to stop the calculated, commercially-motivated and massively damaging abuse of intellectual property rights by Yahoo! China.

Yahoo! China, in which Yahoo! Inc has a 44 per cent stake through its investment in the Alibaba Group, has this week been in court in Beijing trying to contest a ruling that it facilitated mass music piracy through its specialised music service. The Chinese company was ruled liable for illegally providing links to copyright infringing music files in a landmark court decision in Beijing in April.

Yahoo! China, a wholly-owned subsidiary of the Alibaba Group, offers a bespoke music delivery service that enables and induces users to search for, play and download infringing music tracks for free without ever leaving Yahoo! China's website. Yahoo! Inc is represented on the Board of Yahoo! China’s parent company, Alibaba Group.

Eleven separate claims were brought against Yahoo! China by IFPI local and international record companies, who presented evidence of widespread infringement of their copyrights.

IFPI Chairman and CEO John Kennedy said: “It is incredible that the music industry should have to defend its rights in a Chinese court against a company in which an American corporate icon has such a large stake. Yahoo! Inc is one of the best-known international brands on the internet, which runs its own legitimate music services all over the world, including in Hong Kong and Taiwan. Yet in mainland China, Yahoo! Inc is investing in and profiting from the widespread breach of intellectual property rights.

“Yahoo! Inc should be making its name as an architect of legitimate online commerce in China and not allowing its brand to be tarnished with mass copyright infringement.”

The appeal court hearing, which took place on Monday, 12th November, comes only days after the highly successful US$1 billion flotation on the Hong Kong Stock Exchange of Alibaba.com, the business-to-business website and another subsidiary of the Alibaba Group, which is headed by Jack Ma, China’s legendary billionaire internet entrepreneur.

The claims filed by the record companies concerned infringement of tracks by international artists such as Coldplay and Gorillaz, as well as local repertoire performed by singers such as Penny Thai and Ivana Wong.

IFPI wrote to Yahoo! China in April 2006 on behalf of its member record companies, asking it to take the necessary steps to stop the infringement of their rights. The organisation then negotiated with them and was close to reaching an agreement. Yahoo! China decided to walk away from those talks. As a consequence, legal proceedings were then filed in January 2007.