January 1, 2009

Chinese Sentenced For Software Piracy

Six and a half years behind bars. That is what a Chinese counterfeiting gang that sold at least $2 billion worth of bogus Microsoft Corp. software will spend for their illegal actions.

It is believed to be the harshest penalties yet under China's tightened piracy laws.

Eleven defendants received the punishment that was announced by Microsoft Corp.

The strict punishment could help China improve its image as a country that doesn't crack down hard enough on copyright violators.

Microsoft calls the counterfeit software operation the world's biggest phony-software syndicate. It was headquartered in the southern Chinese province of Guangdong and busted by Chinese authorities with FBI help in 2007. 

The counterfeit software was discovered in 36 countries and 11 different languages.

Experts say the illegal material was so sophisticated it contained legitimate computer code written by Microsoft for programs such as Windows XP and Vista and Microsoft Office.

Microsoft said its Windows Genuine Advantage program, which is automatically installed on users' machines, detected the illegal software.

The program scans computers for pirated software and alerts people if it believes their products aren't properly licensed. The firm says the counterfeits were also discovered through customs seizures, test purchases by Microsoft, and resellers who alerted authorities to suspicious competitors.

"There were a number of things that made this case unique and striking, and among them are the fact that customers provided information, the reach of the syndicate was so international, and that Chinese law enforcement partnered so well with American law enforcement," David Finn, Microsoft's associate general counsel for worldwide anti-piracy and anti-counterfeiting, said in an interview.

The Business Software Alliance, an industry trade group, found that 82 percent of the software used in China in 2007 was not legitimately purchased.

Experts say those figures are more than double the worldwide piracy rate of 38 percent.


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