Christmas and the Holidays will come with a bitter taste for Yahoo! China, as it has just lost the suit filed against it by the IFPI, representing companies including Warner Music Group Corp., Sony BMG and Universal Vivendi, for violating copyrights because of links between its search engine and Web sites with 229 illegally copied songs.

This comes on the heels of China's changing its laws on enforcement of copyrights and other intellectual property that gave Yahoo! a 27 thousand dollars fine, in April, for the same charges. That's bad luck, Baidu.com, a Chinese search engine, was sued under the new system and was charged with one million Yuan when it lost the trial.

The International Federation of Pornographic Industries came with the latest news about the trial and, so far, the Court officials would not confirm the report. The company that manages Yahoo! China's arm, Alibaba.com had nothing to say on the matter through the voice of its spokesperson, Porter Erisman, but later on, he acknowledged that Yahoo! had been hoping to strike a deal with the music companies to create a licensed download service.

At the moment the suit was filed, Yahoo was actually in the middle of negotiating with the companies and the talks were suspended pending the ruling of the court. Erisman highlighted that the company had hoped that the latest court ruling would "add clarity" and allow the talks to resume. "We've always said our ultimate goal is to cooperate with the record labels", Erisman said. "Our goal is to protect and support the intellectual property rights of all publishers."

Joe McDonald of the Associated Press states that "China is a leading source of pirated copies of music, movies and other goods. Operators of pirate Web sites offer music, games and other services to attract users and make money from advertising or online commerce."