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Microsoft claims £3.6m piracy scalp in China

Shanghai retailer apologises after reaching settlement

Internet Security Threat Report 2014

Microsoft’s anti-piracy efforts in China chalked up a big win last week when Shanghai retailer Ruichuang Network Technology agreed to pay 36 million yuan (£3.6m) to the software giant in compensation for several infringements.

The firm posted a statement on its popular 2345.com portal site expressing “profound apologies” to Microsoft for its software copyright infringement and promising to respect its IP rights in the future.

Redmond sued Ruichang president Han Meng and VP Han Hong earlier this year, claiming the firm was illegally selling licensed copies of Microsoft software without authorisation, according to Marbridge Daily.

It said that the link to the illegal software download received over 32 million clicks and that more than 11 million people had downloaded it. Ruichang was also accused of flogging close to 1.3m physical copies of pirated Microsoft software.

Redmond was originally gunning for a 100m yuan (£10m) pay-out but apparently accepted the lower offer after mediation from the court.

Microsoft has been increasingly successful targeting big name piracy offenders in China’s private sector over the past few years.

In 2009, 11 ringleaders of a piracy syndicate were jailed for up to six-and-a-half years after a Shenzhen court found them guilty of selling $2bn (£1.3bn) worth of counterfeit software, while in 2010 a Shanghai court awarded it 2.17m yuan (£219,500) after finding Shanghai's Dazhong Insurance had been using hundreds of copies of pirated Microsoft software.

In July of this year, Redmond’s lawyers were at it again, initiating legal proceedings against nine resellers across seven Chinese cities whom they accused of pre-installing pirated copies of Windows onto computers before selling them on to customers.

China is certainly stepping up its efforts to combat digital and software piracy with the government leading by example.

It is spending around US$160 million (£102m) to replace pirated software in central and provincial government offices with genuine versions of the product.

As if to highlight the changing environment in China, Shanghai prosecutors have apparently now filed criminal charges against Ruichang’s president and VP, in the wake of the Microsoft settlement.

However, the scale of the problem in the People’s Republic is still far greater than most other global regions.

The most recent data from anti-piracy lobby group the Business Software Alliance (BSA) point to a piracy rate of 77 per cent – the highest in the world – although the government’s estimates are a much more conservative 38 per cent.

Domestic technology companies are doing their bit too. E-commerce platform provider Taobao recently signed an MoU with the Motion Picture Association designed to reduce the volume of copyright infringing goods sold on the site.

As a result it has the backing of the MPA in its bid to be taken off the US government’s blacklist of ‘Notorious Markets’.

China’s State Intellectual Property Office boss Tian Lipu recently went on the offensive, claiming Western media has distorted the country’s piracy problem and arguing that “China is the world's largest payer" for patent rights, trademark rights and royalties. ®

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