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 Virtual Markets

www.allofmp3.com (Russia). Industry reports that allofmp3.com is the world's largest server-based pirate music website. Allofmp3.com is currently under criminal investigation by Russian authorities. Efforts to shut down the site have so far been unsuccessful.

Baidu (China). Industry has identified Baidu as the largest of an estimated seven or more China-based "MP3 search engines" offering deep links to song files for downloads or streaming. Baidu has been the target of infringement actions. Notably, in September 2005 the People's Court of Haidian District in Beijing reportedly ordered Baidu to pay RMB 68,000 ($8,400) to a music company for unauthorized downloads. Baidu has reportedly appealed.

Kuro (Taiwan). In September 2005, managers of Kuro, a peer-to-peer service, were found guilty along with a subscriber of criminal copyright infringement and sentenced to prison terms. In the 2005 Special 301 Report, the United States encouraged Taiwan to improve efforts toward effectively combating increasing levels of Internet piracy.

Physical Markets

Xiangyang Market (Shanghai, China). In early 2006, the Shanghai Municipal Government said it would close this market on grounds of rampant sale of counterfeit fashion and apparel products. More recently, authorities pushed the closure date back to June 30, 2006. The United States welcomes commitments to close Xiangyang Market, and will monitor their implementation. Authorities must remain alert to the possibility that vendors of infringing products may seek to migrate their operations to other Shanghai markets, or to the Internet.

Silk Street Market (Beijing, China). Industry has cited Beijing's Silk Street Market as "perhaps the single biggest symbol of China's IP enforcement problems." In 2005, authorities began to pressure the landlords of Silk Street Market and other major retail and wholesale markets in Beijing to improve IPR compliance. In contrast to Shanghai's Xiangyang Market, however, authorities have not said they would close down the Silk Street Market. Trademark owners filed civil claims in mid-2005 against the landlord, Beijing Xiushui Haosen Clothing Co. Ltd. In December 2005, the Beijing No. 2 Intermediate Court's IP Tribunal decided five cases in favor of the right holders, imposing liability on the landlords for failing to halt infringements; Beijing's High Court recently upheld that decision.

Yiwu Wholesale Market (Yiwu, China). Yiwu Wholesale Market reportedly sells approximately 410,000 different items, mostly consisting of bulk sales of small consumer goods. Market officials recently estimated receiving approximately 400 complaints of IPR violations from buyers in 2005. Local officials have acknowledged certain problems and stressed their commitment to IPR enforcement.

Gorbushka, Rubin Trade Center, Tsaritsino, and Mitino (Moscow, Russia). In November 2005, a large Ministry of Interior operation reportedly resulted in police raids at numerous markets, including Gorbushka and Mitino. Industry previously reported that a closure of the