Hollywood studios sue Chinese pirates over online content distribution

LOS ANGELES/SHANGHAI — The Hollywood studios have launched a legal action against Xunlei, a large Chinese-language video website, which they accuse of content piracy.

According to a statement from the Motion Picture Association, MPAA member studios filed civil actions Monday in the Nanshan District Court in Shenzhen. They are seeking damages, orders to stop piracy, an apology and reimbursement of their legal costs.

The lawsuit is a major setback for the studios and the MPA, which last year announced a Comprehensive Copyright Protection Agreement with the company.

Xunlei, which operates a download manager and a range of apps that make it similar to a peer-to-peer service, has been widely criticized in the past.

In 2011 it was forced to call off a planned IPO in the U.S. following allegations of mass copyright violation. However, in early June 2014, Xunlei struck the agreement with the MPA and later that month completed a flotation on the Nasdaq stock market, raising $88 million.

And by November last year the MPA issued a report again naming Xunlei as one of the world’s most “notorious markets” for pirate software.

“Recently, Xunlei’s public service, Kankan, transitioned in format and now streams some authorized motion picture content. It also offers a VIP Offline service for a monthly fee. However, infringing content can be found with this service, which is downloaded by Xunlei from an external source and stored to its servers for on-demand viewing. Despite executing a comprehensive content protection agreement with MPA earlier this year, there is no evidence that Xunlei has fulfilled its obligations, and wide levels of infringement are still evident,” read the November report.

“For too long we have witnessed valuable creative content being taken and monetized without the permission of the copyright owner. That has to stop and stop now,” said Mike Ellis, the MPA’s president and managing director Asia Pacific.

The MPA previously sued Xunlei in 2008.

Since that time China has put in place more copyright protection legislation and established specialist copyright courts. Since 2008 many of China’s other online video operators have grown, struck licensing deals with Hollywood studios and other content owners and, on occasion, sued each other over content rights disputes.