China Says Microsoft Violates IP With Windows, Bars Sales

from the well,-look-at-that dept

Wed, Nov 18th 2009 5:52am — Mike Masnick

For years, Microsoft has been among the loudest complainers concerning "piracy" in China, so it's a bit of a surprise to see things switched around a bit. Mesanna was the first of a few to alert us that a Chinese court has found Microsoft guilty of violating the intellectual property of a local firm, Zhongyi Electronics, and demanded that the company cease selling Windows XP throughout China. The issue is the Chinese character fonts. According to Zhongyi, Microsoft licensed them for Windows 95, but not other versions. Microsoft, of course, insists that it is not infringing, and says it will appeal the ruling.

Still, with this ruling, as well as the recent attack on Google for violating copyright in China, it makes you wonder if China is doing this in an attempt to show American firms what might happen if they actually get what they "want" in terms of stronger copyright enforcement in China.

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Filed Under: china, ip. copyright, software, windows
Companies: microsoft, zhongyi

27 Comments

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Jeff, 18 Nov 2009 @ 6:22am

Idea
Microsoft should just stop selling it there then. If someone there wants it, they can order it online and they'll ship it to them.

Problem solved.
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Genie N. DaLamp, 18 Nov 2009 @ 6:25am

Let's see...
Let's see, a few sayings and phrases come to mind... one being...

"Be careful what you ask for... you might get it."

Considering the previous track record of China with EVERYTHING else, why would corporations EVER want them to get involved in IP.

But, greedy corps have asked for it... now, they have it.

Welcome to the new Chinese World Order (tm) (c) (r).
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Dark Helmet (profile), 18 Nov 2009 @ 6:49am

Chinese IP
Okay, two questions come to mind:

"a Chinese court has found Microsoft guilty of violating the intellectual property of a local firm"

So, exactly how many times do you think the editors for The Register went back to the author of the article, insisting that they must have mixed up Microsoft and China in the story, reversing their roles?

More importantly, exactly what is Microsoft's reaction supposed to be when CHINA accuses them of breaking IP law? I mean, other than to just laugh hysterically and then order out for some Kung Pao?

"and demanded that the company cease selling Windows XP throughout China. The issue is the Chinese character fonts. According to Zhongyi, Microsoft licensed them for Windows 95, but not other versions. Microsoft, of course, insists that it is not infringing, and says it will appeal the ruling."

Er, maybe I'm displaying my own ignorance here, but why is Microsoft spending the time, money, and patience in order to fight for their right to sell Windows XP? Aren't they going to be officially closing the books on that beloved OS, even with the hold out manufacturers like HP? Hell, I can't even legally BUY a copy of XP standalone anymore, but they're going to spend money fighting for their right to sell an 8 year old or so operating system in China?
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Michael, 18 Nov 2009 @ 7:02am

XP and China
Microsoft is fighting piracy of Windows XP in China and it has been a bit of a losing battle. They are selling it there at a big discount and branding it on the boxes as the "Legal" version. If they are not allowed to sell it there, pirated copies will simply fill in the gap - not Windows 7 at the moment.

They are having a lot of trouble with getting out hardware to support Vista and Windows 7 in China and (as has happened everywhere) users are falling back on using Windows XP instead. Until they manage to give users a reason to buy Windows 7, they need to continue to be their own biggest competitor to prevent someone else (pirated copies) from becoming it.
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Hephaestus (profile), 18 Nov 2009 @ 7:05am

Unintended consequences ....
Genie N. DaLamp I agree

"Be careful what you ask for... you might get it."

China is going to be fun to watch when ACTA goes through and chinese companies start using it to step on competition, inside and outside of its borders. Tighter IP laws will lead to an unbelievable amount of abuse. Look at what people are using DMCA takedowns for now. Then expand DMCA style rules across international borders with 100 plus languages, minor and major differces in IP laws in each country, and conflicting IP laws.

I wonder if the IP maximalist involved in ACTA and IP reform realize that the unintended consequences of their actions. Worst case is a $200 million dollar movie with $500 million in legal fee's and judgements and an order preventing its release.

... May you live in interesting times
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Overcast (profile), 18 Nov 2009 @ 7:10am

When probably 80%+ of the copies of Windows are not legit in China anyway - will it matter?
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Anonymous Coward, 18 Nov 2009 @ 7:22am

Where is Commodore Matthew Perry?
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Sean T Henry (profile), 18 Nov 2009 @ 7:54am

Re: Idea
Or they can DL it for free or even better go with a *nix operation system.
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Anonymous Coward, 18 Nov 2009 @ 8:52am

Is this truly a fight over copyright or a fight over a garden variety contract dispute?
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Janey, 18 Nov 2009 @ 9:08am

meh. china.
I think it's about time that we (as a country) start reducing the amount of intellectual property and manufacturing that we hand to China. Actually, we should have been doing that a long time ago. We've been ripped off for long enough.
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Anonymous Coward, 18 Nov 2009 @ 9:22am

Thanks, Berne Convention for outsourcing the lawyers!
I for one, am excited. Soon we'll have Chinese Lawyers that are quicker to file, more fact-based (less "social") and cheaper than the American/European equivalent.

Quality will undoubtedly improve with time, just as everything else sent to China.

Super Cool!
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william (profile), 18 Nov 2009 @ 9:40am

HAHAHAHAHA~ sorry I can't help it.

Should I pat myself on the shoulder for a good job predicting this would happen in my previous comment?

http://techdirt.com/articles/20090826/1354186007.shtml#c176
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william (profile), 18 Nov 2009 @ 9:42am

Re:
actually, after re-reading my own comment, I didn't really predict it, just explain how it would happen and why. Mike did most of the prediction.

good job Mike. XD
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Memphistopheles (profile), 18 Nov 2009 @ 9:55am

China's changing opinions on IP
In "Open Busines Models," Chesbrough documents the Chinese attacking one another as regards IP rights. It was written in 2006.

It's nice to see all the self-congratulatory parading around here. This has been going on for years already.
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Anonymous Coward, 18 Nov 2009 @ 10:28am

Re: China's changing opinions on IP
Memphistopheles:

You are absolutely correct. The Chinese realized how great IP was quite a while ago. They have increased the standards for judges and set NATIONAL goals for patent applications (i.e., these are not corporate or individual goals). The Chinese have proclaimed they will be the world leaders in intellectual property. While the Chinese may have originally been encouraged to strengthen their IP laws, they have gone one step further and are adopting them enthusiastically. Some pundits predict that China may end up with the strongest IP system in the world.
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Griffon, 18 Nov 2009 @ 10:48am

Screwy thing is the government is so protective of home grown companies that their is no way MS can get a fair shake even if they are right. They will likely settle like Cisco had to over hawai to keep on the governments good side.
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Gene Anderson, 18 Nov 2009 @ 1:33pm

china
The reality is that America has no enemies 'offically' anymore. Our leader bows to our fundamental enemies.
(forced abortion?) No matter, our leader voted against letting babbies live in botched baby killings when born aline! Kill them anyway he votes!)

Why? because we are moving away from our system of 'we the people'. The masses have fallen for the hype and one day they will wake and and see, we are no longer home of the free and the brave. This is the destiny of every nation that turns away from Christ.

China knows it has enemies. She laughs as we give her things like training her pilots on how to one day fly helicopters and planes against us, right here in the USA.

What companies and leaders do today in the name of peace, would be considered treason less than 50 years ago!

China and Russia have been planning our demise for sometime now. They practice it with thier soldiers did ya know!

So Microsoft, dont worry about it. You have more to worry about then selling in China, how about even exsisting ten years from now? Ask the CFR what the plan is!
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Anonymous Coward, 18 Nov 2009 @ 1:48pm

Re: Re: China's changing opinions on IP
Sounds like the hot ticket to the big bucks in the US in the future is going to be an undergrad degree in Chinese followed by a law degree. Or maybe the Chinese will just send their own people over to get law degrees. Either way, Chinese speaking US lawyers are going to get rich(er).
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Yeah right, 18 Nov 2009 @ 2:37pm

Damn lazy journo's
Is it really too much to ask that whoever writes a story on this looks up more detail on the case. Like, check a few Chinese sources instead of repeating the same idiotic press release?

According to a machine translation of http://tech.sina.com.cn/it/2009-11-17/08083598409.shtml the story is slightly more complex than meets the eye.

In 1994 Microsoft signed a deal with the Chinese government about Chinese language support in Win95. The year after, in 1995, Zong Yi licensed fonts in a deal worth $ 1 million. In 2001 there was licensing deal for extended and reshaped fonts, worth $ 13 million.

The case revolves round the 1994 deal and the phrase in the contract "for the Chinese version of Windows 95 or any other Microsoft product". The court sided with Zong Yi who submitted this meant Win 95 and Microsoft products such as Word, Excel etc., not future versions of the operating system.

Microsofts position is that 'or any other' also includes later versions of the operating system. They paid for the 2001 license agreement because the 2001 version of the font had improved. They also questioned why Zong Yi continued to work with them and signed the 2001 agreement.

In its motivation for the judgement, the court agreed that the conjunction 'or' was used, but that the context of the time was Win 95 and other Microsoft software such as Office. If Microsoft had wanted to license the fonts for any Microsoft product, why did the contract include the reference to Win 95 anyway, instead of just saying 'any Microsoft product'?
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Daemon_ZOGG (profile), 18 Nov 2009 @ 3:37pm

China and M$
I think the court ruling is great. Switching more assets over to Linux and Unix based platforms to satisfy demand would be a cheaper and more efficient option for China.
Screw the greedy bums at m$. We don't need their stinkin', over-priced licenses. And neither does China.

;)
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Anonymous Coward, 18 Nov 2009 @ 11:26pm

Re:
Screwy thing is the government is so protective of home grown companies that their is no way MS can get a fair shake even if they are right.

Funny, that's the same thing they say about the US.
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Anonymous Coward, 18 Nov 2009 @ 11:27pm

Re:
Screwy thing is the government is so protective of home grown companies that their is no way MS can get a fair shake even if they are right.

Funny, that's the same thing they say about the US and Chinese companies.
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C.NutZ, 19 Nov 2009 @ 12:40am

No Ruling
microsuck has enough money to not care about legal fees and such, 200 mil - 500 mil = Mr. Gates Toilet Paper! seriously whats millions of dollars when u have billions of dollars?
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Fred McTaker (profile), 19 Nov 2009 @ 1:05am

Re: Chinese IP
"exactly how many times do you think the editors for The Register went back to the author of the article, insisting that they must have mixed up Microsoft and China in the story"

This shows you haven't read The [UK] Register before. I think their primary name for Microsoft there is "The Beast of Redmond." They are probably still reveling in the irony, over beers at the pub. They love this kind of story, which is why I'm a fan.

"they're going to spend money fighting for their right to sell an 8 year old or so operating system in China"

They're probably simultaneously lobbying for China to adopt even more ridiculously long Copyright periods than the U.S. So yeah, I could see them fighting over an 8 year old OS easy. Call me in 90 years.

China doesn't have nasty limits on Copyright like "freedom of speech", so they shouldn't have any of those messy limitations like "fair use", or inability to monopolize little things like "math" or "statement of facts". They'll be sending Ballmer a license fee every time he sneezes, if a Chinese citizen copyrights the sound of sneezing first.

You would think Microsoft would start re-thinking their IP law stance, after being THE target for software patent trolls, getting caught using a download tool that violated the GPL, and now this. Some monopolists never learn -- there's always a bigger tyrant than you out there, somewhere, waiting for you to try to treat them like all your other boneheaded customers. Microsoft doesn't have nukes (yet), so they're way out of their league.
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Rekrul, 19 Nov 2009 @ 10:26am

So why doesn't MS just hire someone to create a new set of Chinese fonts based on the originals? Unless I'm mistaken, you can't copyright, for lack of a better term, an alphabet, only the look of a specific font. All they have to do is copy the font while making it look slightly different. Use the original fonts for reference as to what the characters should look like, the hinting/kerning, etc. Then dump the old, licensed fonts.

I know that Chinese fonts are much more complex than the English alphabet, but I've messed around with a font editor before and it wasn't exactly hard to make basic characters. How hard could be it for an experienced user to create a new, slightly different Chinese font that MS would own?
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Anonymous Coward, 19 Nov 2009 @ 11:07pm

Re:
a tiny percentage of a giant market is big money
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davidclark (profile), 23 Nov 2009 @ 12:36pm

China and The IT World.
F ** k China. Here's why; They're f**king us, and I don't mean the US - us, the rest of the world, the planet. So now THEY'RE " parsing code " to suit themselves.

It's been estimated that less than 15% of all software in China is legal, licensed code. Do the math - that means 85 percent is STOLEN. Now everyone one of us in the business probably has at least one piece of copied software, but we ain't selling it. There are businesses in China and India which sell ONLY illegal, pirated software . Even the damn packaging is counterfeit.Chineese political control and slight-of-hand manipulation over labor,accounting and marketing practices make FAIR competetion and legitimate business opportunities impossible.
China is sucking the planet dry. Just here in the US, we have lost MILLIONS of jobs to China, all in the name of free trade and it's a crock. Me? I becoming more of a protectionist every day. Ever wonder to what the affect Chinese pirating has on other people's livelihoods? How about where you live and work? How about you personally?
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