Right fight

Quacor.com, a China-based authorized online movie provider, has found itself in a copyright infringement clash with Xunlei Networking Technology Co Ltd, and a Shenzhen City court will soon be in session.

Xunlei met opposition from Quacor last February after offering free movie downloads, of which Quacor claimed to have exclusive online distribution rights.

Xunlei argued that it is only a platform to provide free Internet services to clients through a peer-to-peer engine and should not be held responsible for netizens who spread copyright movies on its website.

After a series of failed negotiations, Quacor sued Xunlei last November for illegally offering download links to copies of The Sun Also Rises, a movie by Chinese director Jiang Wen.

"There was no precedent of a website with a peer-to-peer engine punished by Chinese courts for ignoring copyright protection," Li Luxi, president of Quacor, tells China Business Weekly in an interview.

"Quacor tends to break the ice, and set a successful example to encourage more Internet enterprises to get involve in the campaign against infringement," Li says.

Li says that a group of Internet enterprises in China are infringing on IPRs. Xunlei's movie links appeared online as soon as the movie was shown in the cinema. More than 120 million users have installed Xunlei's download accelerating software and its website attracts more than 50 million visitors a day.

Google Inc, the world's most widely-used search engine, established strategic cooperation with Xunlei on January 5.

"It is unfair competition. Although Quacor pays for the exclusive copyright of these movies, it has to wait two to four weeks to provide the downloading links on its website," Li says.

Xunlei grabbed about 80 percent of Quacor's clients, and it is hard to estimate advertising losses, Li adds.

In response to Quacor's accusations, Xunlei's public relations chief Zhang Yubo says that Xunlei is a responsible enterprise that always advocates copyright protection.

"It is not the first time that Xunlei has been involved in a dispute caused by competition and distribution of benefits," Zhang tells China Business Weekly.

"As one of the leading Internet companies in China, Xunlei wants to promote copyright protection and will take a serious attitude to dealing with the complaint," he says.

Zhang attributes Xunlei's success to its cutting-edge technical team. "We are proud of having the biggest downloading engine in the world, and our service saves 1,800 years of time per day for its users across the world."

Xunlei, which says it stresses social responsibility, organized a copyright protection event at the Peoples Great Hall in Beijing last year, he adds.

However, Zhang refuses to comment about whether Xunlei will take further action to reduce movie infringement links on its websites.

"Xunlei's excuse does not hold water," Li says.

Quacor has also sued another visual service website, tudou.com, for copyright infringement.

Fifty websites signed an agreement initiated by the Movie Copyright Protection Association of China (MCPAC) earlier this month, promising they would not provide access to pirated movies.

The sites, which included China.com.cn, People.com.cn and 163.com, said they would no longer offer films via their viewing or download services.

"It is encouraging that many Chinese Internet enterprises have reached a consensus with Quacor on this point," Li says.

The association said there are about 30,000 Chinese websites that specialize in providing access to visual arts, including films.

Li Guomin, MCPAC's vice-chairman, says that the growth of online pirated movies was doing an enormous amount of damage to the country's film industry and was jeopardizing its healthy development.

"The Internet is a revolutionary way to get access to the visual arts, but the public has to be made more aware of the need for copyright protection," he says.

"If these infringements continue, producers might simply stop making movies. And then 162 million Chinese netizens will lose the service they have now," Li says.

The rapid growth of the Internet and wider access to it is another problem for anti-piracy efforts. According to the latest figures from the MCPAC, more than 61 percent of netizens watched free movies online last year. University students topped the audience list, followed by white-collar workers.

Yan Xiaohong, vice-minister of the National Copyright Administration (NAC), says tougher measures are needed to deter copyright violators. "We must make offenders realize the costs of violation are too high for them to continue," Yan says at a press conference held by the State Council Information Office recently. "Legal punishments are not enough."

Yan says that three nationwide crackdowns against online piracy since 2005 was successful, but "they only served to achieve limited results by dealing with a limited number of cases in a limited period of time".