A Chinese appeal court upheld an earlier music piracy ruling on Thursday, that found Yahoo China guilty of allowing mass copyright infringement through music downloads from its Website, the International Federation of the Phonographic Industry (IFPI) said.

Under the ruling, the court ordered Yahoo China to delete links to Web sites which offer free music downloads. The search engine will also have to pay about 200,000 Yuan for expediting distribution of unlicensed songs by other sites.

The IFPI, which works towards promoting copyright laws and contend privacy, stated the ruling against Yahoo China is extremely significant in clarifying copyright rules for Internet music services in China.

Beijing's Court said earlier in April that Yahoo China should take some responsibility for the copyright infringement, although the music was downloaded from servers of third-party Web sites. Yahoo Inc. owns a 40 percent stake in Yahoo China while China-based Alibaba Group manages the company.

Yahoo China appealed, arguing that search engines should not be liable for content on outside Web sites. The IFPI said that appeal was rejected by the Beijing Higher People's Court.

At the time of the original ruling, a Yahoo China representative said in a statement that Yahoo China's music search service both meets and exceeds the relevant legal standards for intellectual property protection. The company added that search engines shouldn't be held liable for material posted on third-party Web-sites.

According to IFPI estimates, around 85 percent of all music consumed in China is pirated and more than 99 per cent of all music downloaded infringe music copyrights.

In a similar case, Chinese Internet search leader Baidu.com was cleared in November of helping users to download music illegally in a case brought by some of the world's largest music companies. Since then, China has changed its laws on enforcement of copyrights and other intellectual property which results in Yahoo China being sued under the new system.