Microsoft sues Chinese retailers over pirated software before Win 8 launch

Chinese analyst says Microsoft China generates over 80 percent of revenue from anti-piracy activities in the territory.
Written by Cyrus Lee, Contributor

Microsoft China announced Tuesday it had initiated infringement proceedings with nine computer resellers in seven cities in China. Evidence obtained by Redmond showed these dealers installed pirated Windows software in various computer brands, including Lenovo, Hewlett-Packard, Dell and Acer, according to a Sina report.

The initiative came right after the company confirmed it would be delivering Windows 8 to its hardware partners in early-August and the new operating system will be available broadly by the end of October.

The lawsuits will "ring the alarm to those computer dealers who do not respect intellectual property rights" in China, said Tim Cranton, chief legal consultant for the Greater China Region at Microsoft.

The U.S. software vendor has escalated its combat against computer dealers in China that offer pre-installed pirate software, particularly illegal copies of Microsoft operating system that are installed in new PCs sold to consumers. It sued several computer dealers in the past few years and reached settlement with these companies in most of the circumstances.

Fang Xingdong, a Chinese Web entrepreneur, said Microsoft draws 80 percent of its income from anti-piracy activities in China, which is a better way to earn money compared with selling genuine software products, according to the Sina report.

The proportion of China's personal computers with pre-installed pirated software fell to 77 percent in 2011, a new record low and a decrease of 15 percentage points since 2003, according to report released by the Business Software Alliance (BSA) in May.

However, another report commissioned by State Intellectual Property Office released in May said China's software piracy rate was 11.8 percent in 2011, compared to 12 percent the previous year. The piracy-rate of paid software stood at 38 percent last year, down from 41 percent in 2010.

It questioned the BSA's understanding of related concepts and data sources, which it said was only on behalf of the interests of a few foreign software enterprises including Microsoft. 

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