Forbes magazine listed Li this month as the richest man in China with a fortune of $9.4 billion. Record companies have taken Baidu to court over a similar issue, claiming copyright infringement over its mp3 search service that allows users to easily find and download music for free.

Baidu was listed last May as one of the world's most notorious piracy sites by the Congressional International Anti-Piracy Caucus, a watchdog group formed by 70 US lawmakers.

At an annual IT leaders summit in Shenzhen on Monday, Baidu's Li publicly responded for the first time to the dispute. He said he'd had many sleepless nights, and that the public misunderstands the company's actions. Li said Baidu is stepping up anti-piracy efforts and hopes to work out a mutually beneficial business model to settle the current issue.

He also mentioned the possibility of shutting down Baidu Wenku. "I made myself very clear inside the company. If we can't manage this, then we will shut it down."

Protection model

Baidu's vice-president, Zhu Guang, told National Business Daily last week that Baidu intends to address the writers' and publishers' complaints with new technology in mid-April. It would allow Baidu to compare its database of copyright books against users' uploads, and to reject the pirated uploads by the public.

Authors said no to what they called the "Zhu Guang model" because it would require the copyright holders to upload their books to Baidu to provide the comparison copy. "This is a kidnapping of copyright holders, and we will never accept it," they wrote in a statement.

Wang Ziqiang, director of the copyright department of National Copyright Administration (NCA), told China Daily on Monday that NCA welcomed Baidu's action of removing pirated uploads and supported the authors' rights.

"This dispute cannot be solved simply with anger," Wang said. "If negotiations cannot solve the problem of piracy, we support the copyright holders to protect their rights in other ways, including taking the infringing party to court."

His deputy, WangZhicheng, said Monday that the department interviewed Baidu officials on the copyright dispute in late February and that it had delegated Beijing Municipal Bureau of Copyright to investigate further.

He called for companies to operate their businesses in a law-abiding and honest way, and said they should not abuse the so-called safe harbor rules within the Protection of the Right to Online Dissemination of Information. Promulgated in 2006, the rules say that when a service provider unintentionally facilitates pirated contents but deletes them after being notified, it will not be liable for compensation.