China court on Microsoft case: "Serious offense" deserves tough penalty

The Microsoft case involved a serious crime, a Chinese court told Xinhua on Sunday regarding its decision to jail 11 people for organized piracy of the U.S. software firm's products.

"The three primary offenders in this case violated copyright in a very serious way," according to a statement by the Futian Court, which is based in the southern city of Shenzhen.

Using legal copies of software, they made counterfeit copies that were worth 305.65 million yuan (44.3 million U.S. dollars), the statement said.

According to the statement, Wang Wenhua, Zhang Da'an and Che Tingfeng organized a group to use sophisticated facilities to replicate Windows and Office software as well as holograms of Microsoft's Certificate of Authenticity. They sold fake software products not only in the Chinese mainland, but also to other countries and regions such as the United States, Canada, Germany and Israel, via online distribution.

Wang and his counterfeit ring were found to have made illicit gains of 1.9 million yuan by counterfeiting 15,000 disks of Microsoft software and distributing 54,837 disks, said the statement.

On Dec. 31, Wang was sentenced to six and a-half years in prison with a fine of 1.5 million yuan.

China's Criminal Law defines "especially grave violations of copyright" as those involving 2,500 or more copies. Violators could be sentenced to three to seven years in jail. Suspects in similar cases could face up to five years in prison in the United States.

Zhang and Che were sentenced to five years and three and a-half years in jail, respectively, with fines of 400,000 yuan and 800,000 yuan. Eight other offenders were jailed for 18 months to three and a half years.

The verdict was arrived at under the Criminal Law and two judicial explanations on criminal cases of violation of intellectual property rights by the Supreme People's Court and Supreme People's Procuratorate, the statement said.

"Two of the 11 convicted have appealed," said a Futian court official who declined to be identified. The convicted have 10 days to submit an appeal of their verdict.

Li Shunde, a legal scholar who heads the Chinese Academy of Social Sciences Intellectual Property Research Center, told Xinhua: "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.

Microsoft claimed that the ring produced and distributed an estimated 2 billion U.S. dollars worth of high-quality counterfeit Microsoft software.

But the court did not accept its calculations. It totaled the actual income from illegal activities and the value of counterfeits fixed by Chinese law enforcement officials.