Youku and Tudou suing each other

The two leading video-sharing portals in China are suing each other for more than 100 million yuan ($15.8 million), each claiming the other is pirating its content.

In mid-December Tudou.com announced it would file a lawsuit against Youku.com, which in turn said it was the victim of piracy and will also ask for more than 100 million yuan in compensation.

The public dispute grabbed headlines in the Chinese media and again put copyright concerns in the spotlight.

Yu Bin, financial and legal vice-president of Tudou, told a press conference on Dec 16 that the fracas started over Tudou's exclusive Chinese mainland deal for the Taiwan-made TV program Kangxi Come.

With a copyright in force from Dec 1 until the end of November next year, Yu said the show has already been pirated by other portals including Youku.

He alleged that most of the infringing videos on Youku were directly uploaded by its editors.

In his microblog Tudou CEO Wang Wei said Youku carried unauthorized content including Kangxi Come and sold ads in the videos, adding that the pirated content was even recommended by Youku's editors.

Links to infringing videos have now surpassed 80,000, he added.

The intentional piracy could take the online TV and movie industry back to the chaos littered with copyright disputes of two years ago, he said.

Youku fired back, asserting that more than 100 films and entertainment programs as well as its proprietary videos have been pirated by Tudou.

Youku said it will file suit against Tudou in both Beijing and Shanghai asking for more than 100 million yuan in compensation.

Xinhua news agency cited Shi Yihua, business director of the Shanghai Multimedia Industry Association, saying that "no matter who is right, the dispute over copyrights is to some degree a blow against infringements".

Legal, copyrighted content has become central in the portals' battle over market share, industry insiders said.

Prices for legitimate popular films and TV series have surged over the past year from 10,000 yuan an episode a year ago to 1 million yuan or even 2 million yuan currently.

Sohu.com bought the exclusive online rights for the TV series New My Fair Princess for 20 million yuan in July, while Tencent.com - operator of QQ.com, one of the largest Web portals in China - paid 70 million yuan in October for the exclusive online rights to the new TV series Palace II.

While purchase prices for copyrighted content are skyrocketing, penalties for infringement remain light.

According to the intellectual property website cnipr.com, "the penalties for online video piracy are too low".

"It may take several months to go through legal proceedings and the final compensation might be just 10,000 yuan," it reports.

But many video websites are now publicly traded companies - Youku is listed on the New York Stock Exchange and Tudou is on the NASDAQ - so use of legal content is no longer a voluntary act in business, said Liu Chunquan, a senior partner of a Shanghai law firm.

Stock prices and the market add another layer of governance, he said.