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Microsoft has lost the first software piracy case in Kenya because of an extraordinary dismissal decision by the Commercial Court in Nairobi last week, according to the newspaper The East African. Microsoft had been seeking the imprisonment of Mohamed Suleiman, managing director of local PC OEM Microskills, whom it accused of illegally loading its software, and had also asked the court to put the company into receivership. Suleiman said the ruling was "a victory for morality against the unethical mercenary tendencies of a greedy multinational that thrives on bullying tactics." Last year Microsoft successfully applied to the court for a search order and, accompanied by its lawyers and the police, raided Microskills' premises, taking documents and 68 computers -- and discovered counterfeit Microsoft software. There was then an unsuccessful attempt to resolve the matter through arbitration. Microsoft demanded 30 million Kenyan shillings ($417,000), but Microskills said it could not afford to pay this and carried on trading in Microsoft software, in contravention of a restraining order issued by the court. Shem Ochuodho, chairman of the Computer Society of Kenya, who was involved in the arbitration, admitted that both sides had a case. Piracy resulted from high prices, he said, with the software cost being around the same as the hardware cost for a PC. Suleiman, while not denying that the PCs had Microsoft software, argued that Kenyans should not be expected to pay more for software when their income is ten-times lower than people in the western world. He told The Daily Nation that "Office 97 sells for over $700 in Kenya" and that even if the 5 per cent duty and 15 per cent value-added tax is deducted, "the price still remains at over $500", observing that "the same software sells at far less below this price" elsewhere. Windows 98 was selling at $198. The BSA estimates that nine out of ten software packages in Kenya are pirated. A report by Vincent Opiyo of the US Department of State in November said that "The Kenya computer software industry... is dominated by foreign companies led by those from the United States of America. US companies have exploited this industry... imported software accounts for 95 percent of the market...". In discussing software distribution, the report also noted that "Microsoft would ideally not like a VAR handling IBM/Lotus products". No explanation seems to have been given by the court for its decision, and it is not at present clear whether there was a judicial desire not to enforce Kenyan copyright legislation which came into effect on 1 January, or whether events at the World Trade Organisation meeting in Seattle had influenced the outcome. The new legislation requires the setting-up of an anti-piracy committee, but government departments may not yet have nominated their representatives; the software industry is known to have made its own proposals. ®

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