Yahoo's China arm lost a case in a Beijing court that found it had infringed copyrights by allowing links to pirated music on its search engine.

The Beijing No. 2 Intermediate People's Court ordered the search company to pay 210,000 yuan ($27,000 USD) to the record labels that brought the suit, including Warner Music Group, BMG, and Universal.

While the court itself did not confirm the ruling, Yahoo issued a statement saying that it will appeal it, The company argues that it was already doing all it could to protect intellectual property, and shouldn't be held liable for content on third-party sites.

A court had ruled in favor of search engine Baidu.com in a similar case last November, and Yahoo expected the court to rule in a similar fashion and expressed confidence it would be victorious in its own case.

It was not immediately clear why the court ruled differently this time. However, it did admit that Yahoo wasn't completely responsible for the infringement, despite allowing links from its search engine which helped the process along,

The case was filed by the International Federation of the Phonographic Industry in January. In a statement, the group praised the court's decision.

"This judgment will boost the growth of a licensed digital music business in China and provide better protection for intellectual property in this vast, exciting market," chairman and CEO John Kennedy said.

"The judgment gives our members the legal basis to require all music search engines in China to remove infringing links from their service - which we will do," he continued.