CHINA: AI Showdown Could Reshape the Digital Content Landscape

In a landmark legal battle that has shaken China’s tech and entertainment industries, Tencent and Baidu have battled over artificial intelligence (AI), copyright, and the boundaries of unfair competition. This case could redefine how AI interacts with intellectual property (IP) in the streaming era.

Tencent, a media giant behind a famous TV drama called Joy of Life, accused Baidu of using its AI-powered video editing tool, DuJia, to store and distribute unauthorized clips from Tencent’s copyrighted content. According to Tencent, Baidu’s video editing tool went beyond mere editing: it actively processed and provided short video snippets to users, which infringed upon Tencent’s copyright rights and constituted unfair competition.

Baidu pushed back and argued that DuJia is a neutral video editing platform with no creativity function. Tencent pointed out that such a statement contradicted Baidu’s marketing statement in which Baidu claimed that DuJia is an AI-driven tool. Therefore, Baidu’s behavior constituted false advertising. The stage was set for a legal showdown to test the limits of AI innovation and copyright law in China.

The court ruled that Baidu’s DuJia should be considered an AI tool and the content the tool generated directly infringed Tencent’s copyright and its exclusive digital distribution rights. Baidu’s tool was processing, storing, and serving up copyrighted materials, crossing the line into illegal territory.

Although the court rejected Tencent’s false advertising claim and stated that DuJia is aligned with the broad definition of generative AI, this ruling made one thing clear: companies leveraging AI tools cannot hide behind claims of neutrality when their technologies handle protected content.

For businesses racing to harness AI, this case is a flashing red light, and here are some tips they should consider:

• Build robust safeguards: AI tools should include efficient complaint mechanisms and regular IP policy updates to prevent infringement.
• Advertise with transparency: Misleading claims about AI capabilities can backfire.
• Prioritize compliance: Innovation is critical, but it must be balanced with IP law.

As AI continues to reshape content creation, this case serves as both a warning and a roadmap. For brands, developers, and content creators, the message is clear: adapt, comply, and innovate—or risk becoming the next headline in a legal battle.

Although every effort has been made to verify the accuracy of this article, readers are urged to check independently on matters of specific concern or interest. Law & Practice updates are published without comment from INTA except where it has taken an official position.

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