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Microsoft Settles Chinese IP Dispute

by Mary Swire, for LawAndTax-News.com, Hong Kong

19 July 2010


Microsoft has reached an out of court settlement with a Chinese company to end an intellectual property lawsuit, in another victory for the company as it seeks to crack down on the widespread use of pirated copies of its software in the country.

Microsoft revealed on July 15 that the settlement with CITIC Kingston Securities was reached last month following a court hearing in the eastern Chinese city of Hanhzhou in April this year. As part of the settlement, the Chinese firm has agreed to purchase about USD475,000 worth of software from Microsoft as well as pay the US firm a sum for past copyright infringement.

Microsoft will also help CITIC establish a software asset management firm and maintain a long-term commercial relationship with the Chinese company as part of the settlement.

The settlement is the largest yet won by Microsoft in China as it battles to reduce the level of pirated copies of its software currently being used in homes and business across the country. It follows a ruling by a Shanghai court in April against Dazhong Insurance Co. which was ordered to pay Microsoft CNY2.17m (USD320,000) for using unlicensed versions of its software.

At present, however, these settlements are a mere drop in the ocean compared to the scale of unlicensed Microsoft products in use in China. It has been suggested that as much as 90% of the copies of Microsoft Office in use in China are counterfeit and Microsoft CEO Steve Ballmer told Bloomberg recently that the level of counterfeiting in the country was a barrier to Microsoft investing in China.

“India is not perfect but the intellectual property protection in India is far, far better than it would be in China,” Ballmer told Bloomberg in May. “China is a less interesting market to us than India, than Indonesia.”

TAGS: court | business | commerce | law | intellectual property | copyright | China | e-commerce

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