Tuesday, May 30, 2006

Web Copyright Law "Vindicated" Search Engine

Yesterday, China's "Web Copyright Law" formally established. According to executive order #468 signed by Chinese premier Wen Jiabao, China's "Regulation of Copyright Protection On Information Dissemination Through Internet" will be in effect start on July 1, 2006.

After carefully read through it, we can see the regulation is intended to fully protect the public's right to legally obtain information and at the same time to protect the author's right sufficiently. It is also intended to protect technological development and innovations on the internet. For many judges who are having hard time to "grasp" the many cases, this regulation will give them the interpretation.

For the many web MP3 cases that are boiling over in the legal world, the regulation is sending a clearer signial. Illegal dissemination is guilty while legal search is not. It intends to hit hard on those who illegally spread music files while still protect the public's rights to search and download music legally.

The search engines led by Baidu and Yahoo can now feel a sense of relief - their hugely powerful search engines can index large amount of music links and thus regarded as violators of "sacred music copyrights" by many record companines. The new regulation will wash them clean of the "unrighted wrongs". Based on the new regulation, search engines will retain the right to provide music links searched by the internet users. However, since search engine itself can not differentiate legally from illegal download links, the new regulations also award copyright owners protections. For copyright owners, once they find any illegal download links, they can require the search engines to remove these links timely.

Most traditional record companies lauded the new regulation. The wonderful music products from their hard work will finally get "organizational" protections. While still, some lawsuits filed by the record companies against the search engines will likely be affected by the new regulation. Such as the pending case filed by Shanghai Busheng against Baidu which has entered the second phase may be affected. Currently, it is under court mediation (Both sides agreed to accept court mediation in the appeals court). In reference to the new regulations that is clear on the basic principle - seach engine itself is innocent, the final outcome will be influenced by the new regulation.

Busheng's case could become a landmark case for online music. Though many record companies are blaming the search engines for the illegal activities, not many other companies will likely to imitate Busheng to "pay lawyers to buy publicity".

The publish of the new regulation will inevitably push traditional record companies to cooperation from confliction. From the experiences of the US record companies, every one of the biggies has gone through being annoyed, to exclusion, to final acception to jointly develop music sales on the web with music websites.In the US, online music sales has become necessary source of revenue for the record companies. Web operators usually pay 14 cents license fee to play a song for each listener. Some music stores developed by high tech companies such as Apple's iTune has born. Customers pay 99 cents for each song they download. There are over three million songs downloaded every week. The hot selling service also promoted Apple's sale of MP3 player, the iPod. It truely realized the win-win situation for both record company and website.

In fact, in China, there are already small number of record companies are collaborating with webistes to promote online sales of music. For example, TRMusic(the largest Chinese record company) has had tremendous success by joining with Baidu to sell the singles by Supergirl Yuchun Li online.

Industrial analysts think, as dealing with high tech websites, Chinese record companies are in a psycological transition period from conflicts to coorperation. The establishment of the new regulation will not only underline the determination of the Chinese government to connect China's IPR protection laws with the international laws, but also will push the traditional IPR owning businesses to change their way of operations and move onto a win-win combination by joining hands with search engines and other high tech industries.

By Lu Peng


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