Industry 'encouraged' as site pays penalties.

A Chinese court decision finding Internet portal guilty of copyright violation is being hailed as a landmark ruling that sets an important precedent for labels and publishers.

After a seven-month trial, the No. 2 Intermediate People's Court of Beijing ruled June 21 that the portal had illegally used ringtones and other content by Taiwanese male vocalist Jay Chou, whose publisher is Hong Kong-based BMG Music Publishing Asia.

The court orderd to pay penalties totaling 50,000 yuan ($6,252).

"We are all very encouraged by this result, and we remain confident that the Chinese government's enforcement of copyright protection will continue," says Hong Kong-based BMG Music Publishing Asia regional finance director Beryl Wong.

Also welcoming the court's verdict is Scarlett Li, president of Beijing-based digital rights management company R2G, which has exclusive online distribution rights for Chou's catalog in China.

"This is an exciting verdict and one that sends a clear message to service providers (as content aggregators are termed in China) and pirates," says Li. "The court's decision has effectively doubled the amount of compensation for both record labels and publishers. It also represents the protection of the legal use of music in the digital sphere."

Representatives of were not available for comment at press time. is one of six companies recently sued by R2G on behalf of BMG Music Publishing and Universal Music Publishing for allegedly offering unauthorized ringtone and ringback services. The others are Hurray Solutions, and, 21cn and 9Sky. Those cases are still before the courts.