user who has no authorization for sharing such contents, the internet service provider shall be presumed to be at fault. These interpretations could subject us and other internet service
providers to significant administrative burdens and litigation risks.
We conduct our business operations primarily in
China. There might be claims that we are subject to U.S. copyright laws, including the legal standards for determining indirect liability for copyright infringement, although we believe such claims are without merits. We cannot assure you that
we will not be subject to copyright infringement lawsuits or other proceedings in the U.S. or elsewhere in the future.
Intellectual property litigation is expensive and time-consuming and could divert resources and management attention from the
operations of our business. We are currently named as defendant in certain copyright infringement suits in connection with Baidu Netdisk, Baidu Post Bar, Mobile Baidu, iQiyi and certain other products or services. See Item 8.A. Financial
InformationConsolidated Statements and Other Financial InformationLegal Proceedings. There is no guarantee that the courts will accept our defenses and rule in our favor. If there is a successful claim of infringement, we may be
required to discontinue the infringing activities, pay substantial fines and damages and/or enter into royalty or license agreements that may not be available on commercially acceptable terms, if at all. Our failure to obtain a license of the rights
on a timely basis could harm our business. Any intellectual property litigation by third parties and/or negative publicity alleging our intellectual property infringement could have an adverse effect on our business, reputation, financial condition
or results of operations. To address the risks relating to intellectual property infringement, we may have to substantially modify, limit or terminate some of our search services. Any such change could materially affect user experience and in turn
have an adverse impact on our business.
We have been and may again be subject to claims and investigations based on the content
found on our platform, the results in our paid search listings or other products and services we offer.
addition to the content developed by ourselves and posted on our platform, our users are free to post information on Baidu Post Bar, Baidu Knows, Baidu Encyclopedia, Baidu WenKu and other sections of our platform, and our P4P customers may create
text-based descriptions, image descriptions and other phrases to be used as text, image or keywords in our search listings, and users can also use our personal cloud computing service, Baidu Netdisk, to upload, store and share documents, images,
audios and videos on our cloud servers. We have been and may continue to be subject to claims and investigations for intellectual property infringement, defamation, negligence or other legal theories based on the content found on our platform, the
results in our paid search listings or our other products and services, which, with or without merit, may result in diversion of management attention and financial resources and negative publicity on our brand and reputation. See
Item 8.A. Financial InformationConsolidated Statements and Other Financial InformationLegal Proceedings. Furthermore, if the content posted on our platform or found, stored or shared through our other products and
services contains information that government authorities find objectionable, our platform or relevant products or services may be shut down and we may be subject to other penalties. See Risks Related to Doing Business in
ChinaRegulation and censorship of information disseminated over the internet in China may adversely affect our business, and subject us to liability for information displayed on or linked to our platform and negative publicity in international
We have been, and in the future may again be, subject to claims, investigations or negative publicity based
on the results in our paid search listings. Claims have been filed against us after we allowed certain customers to register keywords containing trademarks, trade names or brand names owned by others and displayed links to such customers
websites in our paid search listings. While we maintain a database of certain well-known trademarks and continually update our system algorithms and functions aiming at preventing customers from submitting a keyword containing the well-known
trademarks that are owned by others, it is not possible for us to completely prevent our customers from bidding on keywords that contain trademarks, trade names or brand names owned by others. In 2016, PRC regulatory authorities required that we
take several remedial measures, including: (i) immediately modifying our practice of providing online marketing services to medical,