Legal experts said on January 3 that this week's conviction of 11 people who were involved in an organized piracy ring involving Microsoft showed China's resolve in global intellectual property rights (IPR) protection.

The Futian Court in the southern city of Shenzhen on Wednesday sentenced 11 people who violated Chinese criminal and copyright laws to make pirated Microsoft software and distribute copies to Australia, Canada, Germany, the United States and other countries.

The three principal offenders face stiff sentences of six and a-half years, five years and three and a-half years respectively, the stiffest sentences from Chinese courts for IPR infringement.

Li Shunde, a law scholar who heads the Chinese Academy of Social Sciences Intellectual Property Research Center, told Xinhua on Saturday: "This [case] shows China's sincerity in implementing intellectual property law enforcement."

In an official statement from its Redmond, Washington headquarters in the United States shortly after the sentencing, Microsoft said it "greatly appreciates" the work done in China in "taking strong enforcement action against global software counterfeiting syndicate.

"Thanks to the actions of the Chinese government, we have seen a significant improvement in the environment for intellectual property rights in China," Fengming Liu, vice president of Microsoft Greater China Region, said in the statement.

According to the court, ringleaders Wang Wenhua, Zhang Da'an and Che Tingfeng organized a group to use sophisticated facilities to replicate Windows XP Professional, Windows XP and Office 2003 as well as holograms of Microsoft's Certificate of Authenticity. They sold fake software products not only in the Chinese mainland, but also in the Hong Kong Special Administrative Region and other countries, via online distribution.

Wang Jun, an IPR scholar at the Shanghai-based Fudan University, said, "Our eyes shone as we heard the verdicts. I and my fellow researchers sensed that China meant business this time," Wang said.

"However, as the verdicts were meted out at a local district court and Shenzhen took the lead in doing many things, further observation is needed to determine whether the case will be a 'milestone' for the country's intellectual property law enforcement."

Wang Quan'an, the press office director of the Shenzhen Intermediate People's Court, told Xinhua that "We only meted out verdicts according to facts and proof" but refused to give further comments.

With concerted efforts of China's Public Security organs and the US Federal Bureau of Investigation, transnational law enforcement staff in July 2007 cracked down on the Microsoft counterfeiting syndicate and arrested Wang, Zhang, Che and the other perpetrators.

China's Criminal Law states that especially grave violations of copyright, involving 2,500 or more copies, warrant imprisonment of three to seven years. Suspects in similar cases could face up to five years in prison in the United States.

According to the Futian Court, the principal offenders made more than 2,500 copies.

Wang, Zhang and Che plead guilty but have already appealed. A final verdict is estimated to take at least four months, a law expert said.

Microsoft claimed that the 11 people were part of a network responsible for manufacturing and distributing an estimated US$2 billion worth of high-quality counterfeit Microsoft software.

The court did not accept Microsoft's calculations. Its verdict, in line with Chinese law, totals the actual income from illegal activities and the value of counterfeits fixed by Chinese law enforcement officials.

"China has, all along, been earnestly enforcing laws on intellectual property protection," Li said.

He attributed "heavier penalties imposed on intellectual protection infringement in recent years" to the seemingly-stiffer verdicts in the case.

A judicial explanation that took effect in 2007 lowered the threshold for especially grave copyright violations prescribed in the 2004 edition from copying 5,000 or more to 2,500 or more pirates.

Fudan University's Wang said 2,500 pirated CDs might be just a month's sales for a street vendor.

Despite repeated complaints of being a primary target of piracy, Microsoft aroused controversy in China by launching in October a tracking and warning campaign against unauthorized Windows XP users in China.

The online test tool, Windows Genuine Advantage (WGA), would send constant reminders to users and "black screen" their desktop background after 60 minutes if WGA could not authenticate their copy of Windows.

A Beijing-based lawyer, Dong Zhengwei, told Chinese law enforcement that Microsoft's test tool was a form of trespassing on private property such as personal computers.

(Xinhua News Agency January 4, 2009)