Microsoft Corp. said a court in China convicted 11 people for manufacturing and distributing counterfeit Microsoft software that the company valued at $2 billion.The sentences, which Microsoft said were the toughest yet for this type of crime in China, ranged from a year-and-a-half to six-and-a-half years. The company characterized it as the largest software counterfeiting case yet in terms of lost sales.
The counterfeiting syndicate involved in the case was found to have distributed high-quality fake versions of 19 products including Windows XP, Windows Vista and Office 2007, in at least 11 languages in 36 countries, Microsoft said. Software made by the syndicate was identified in more than 300 different cities in the U.S. alone, the company added.
Rampant software piracy in China has long been an issue for companies like Microsoft because China has until now tended to be lenient with offenders of intellectual property rights. Companies have been pressuring the government for years to crack down on the piracy of movies, music and computer software.
“I hope that this is an example of a continuation of increased international collaboration and commitment to protecting intellectual property,” said David Finn, associate general counsel for world-wide antipiracy and anticounterfeiting at Microsoft.
The Redmond, Wash., company said 25 members of the syndicate were arrested by Chinese authorities in July 2007 after a joint investigation by the U.S. Federal Bureau of Investigation and China’s Public Security Bureau. Microsoft had been tracking the group since 2001.
Mr. Finn said the group had a bigger factory production capacity than Microsoft’s own production facilities in Europe, Middle East and Africa.
The company said tens of thousands of customers helped in the investigation by using its antipiracy technology to verify whether their software was genuine or not.