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Youku, Tudou Trade Claims of Infringement Over Online Videos

Youku.com Inc. (YOKU) and Tudou Holdings Ltd., China’s two largest operators of online video sites, are accusing each other of intellectual property infringements by running pirated videos.

Youku is illegally showing the entertainment program series “Kangxi is Coming,” whose online broadcast rights in China are owned by Tudou, Yu Bin, vice president of finance at Tudou, said in a phone interview today. Tudou has violated Youku’s rights on “more than 60 serials” including “The Emperor’s Harem,” Youku spokeswoman Jean Shao said in a separate phone interview.

The companies, both listed in New York, compete with each other by licensing content such as TV programs and films to win viewers in China, the world’s biggest Internet market by users. Neither has had an annual profit in at least three years, according to data compiled by Bloomberg.

Tudou “completely denies” the infringement allegations by Youku, Yu said. Youku’s Shao said Tudou’s claims were “unfair and misleading.”

Tudou’s American depositary receipts fell 2.5 percent to $11.25 in New York trading yesterday, the lowest since their debut in August. Youku fell 3.8 percent to $17.18.

An initial public offering by Shanghai-based Tudou in August raised $174 million after attracting investors including Sina Corp., operator of China’s most popular microblogging service. The IPO by Beijing-based Youku raised $233.3 million in December 2010.

To contact Bloomberg News staff for this story: Edmond Lococo in Beijing at elococo@bloomberg.net; Mark Lee in Hong Kong at wlee37@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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