December 19,2009

Shanda Literature to Sue Baidu over Piracy

By CSC staff, Shanghai

Shanda Literature is making claims against popular Chinese search engine Baidu, saying that it is allowing the theft of its copyrighted content, and is to launch an infringement suit against it supported by Chinese writers and organizations for creative industries. The case is the first one over rights protection in the domestic creative industry.

Shanda Literature says Baidu has maintained a lenient attitude towards pirates, and Baidu's paste bar has become the most afflicted area of online literature piracy.


Shanda signs exclusive contracts with authors and shares revenues. Baidu, Shanda claims, hasn't shouldered the responsibility for timely detection and removal in its search results. Its search results are thus littered with websites that offer any number of pirated works, leading to a loss of readers for original works and seriously affecting authors' royalty revenues. As the agent for the rights of authors, Shanda Literature has the obligation to safeguard authors' rights.


Shanda Literature says that its 10 most popular novels have suffered greatly from piracy. There are 9,320,000 links in Baidu's search results for the copyrighted work, The Big Dipper Breaks the Sky. Except for the first content on the first page for the original work, others links are to pirate websites, and some even use the advertisement text "including VIP sections."


Experts believe that Baidu conducts business with a number of small websites in bid ranking and advertising alliances, and may well have hidden relationships with pirate websites---Baidu providing top ranking for pirate websites which brings huge traffic for Baidu.


Baidu is also accused of manipulating its ranking list, putting online fictions from Shanda Literature into hot search for no reason. Baidu's paste bar is the disaster area of online literature piracy. VIP sections of signed works from Shanda are posted to Baidu paste bar in less than half an hour after the author posts it, with hits of 100,000.


In 2008 and 2009, Shanda Literature has demanded through both oral and written contacts that Baidu delete infringing links, but has so far received only a cold shoulder. Google, on the other hand, has in a timely manner removed pirate links after receiving requests from rights holders, and provides feedback to results one by one. Shanda says that no matter what right holders do, Baidu never provides information about deletion, nor does it completely remove conclusively proven infringement links.


Shanda Literature accuses Baidu of being the "champion and glue" of the pirate industry chain. With music, video, and software having already fallen victim to pirates, online literature is regarded as a sunrise industry and faces serious threat from piracy and search engines.


Shanda Literature says Baidu causes serious losses to its online literature websites. According to conservative estimates, at present there are about 100,000 large-scale pirate websites, and millions of small and medium-sized ones. The value of the pirate market is around five billion yuan each year, while that of legitimate market is just 100 million yuan over the same period. Each of Shanda Literature's Top 10 most popular original internet novels is pirated eight million times, meaning that if the cost of reading a novel online is one yuan, the economic loss of an original internet novel is eight million yuan. Shanda Literature's annual loss due to piracy is as high as one billion yuan, which also means losses to the authors who have signed contracts.


Lawyers for Shanda Literature are set to launch a lawsuit against Baidu in January, 2010, over five seriously affected literary works, claiming millions of yuan in damages.


Shanda Literature CEO Hou Xiaoqiang says, "Nowadays when we scan for the most popular non-network literature over the past year in Baidu, we find that it is also being pirated. Our rights protection lawsuit against Baidu is not only for our internet writers but also for traditional writers who also suffer a lot. The issue of piracy is life-and-death for China's creative industries. As a company earning two or three cents on 1000 words, Shanda Literature is ready for this war."

The China Written Works Copyright Society states that it fully supports Shanda's rights protection action. The "Anti-piracy Declaration" promoted by Shanda has won support from many well-known domestic and online authors.

So far Baidu has made no comments on  this.

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