Microsoft Applies Doctrine of Landlord Liability To Software Piracy

Peter Ollier has an interesting article for Managing Copyright about Microsoft's alleged first landlord liability case to tackle rampant software piracy.

Microsoft is suing Beijing Chaoyang Buynow because two of retailers, Beijing Hongguang Century Trading and Beijing Zhuojue Elements Trading were selling computers with pre-installed counterfeit Microsoft Windows and  Office. 

The other case, whereby Microsoft is suing retailer Shanghai Gome at Shanghai Huangpu District People's Court seems to be a traditional case (at least when Shanghai Gome is a subsidiary of Gome Electrical Appliances Holding Limited)

Read Mr Ollier's article here.

Landlord liability in tort law 

Article 2 Tort Law 2010: Those who infringe upon civil rights and interests shall be subject to the tort liability according to this Law. “Civil rights and interests” used in this Law shall include the right to life, the right to health, the right to name, the right to reputation, the right to honor, right to self image, right of privacy, marital autonomy, guardianship, ownership, usufruct, security interest, copyright, patent right, exclusive right to use a trademark, right to discovery, equities, right of succession, and other personal and property rights and interests.

Article 9 Tort Law 2010: One who abets or assists another person in committing a tort shall be liable jointly and severally with the tortfeasor. One who abets or assists a person who does not have civil conduct capacity or only has limited civil conduct capacity in committing a tort shall assume the tort liability; the guardian of such a person without civil conduct capacity or with limited civil conduct capacity shall assume the relevant liability if failing to fulfill his guardian duties. 

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Taiwan Shining Intellectual Property Blueprint For China Or Wishful Thinking?

What works for Taiwan, 
does (not)
necessarily works for China,
and vice versa.

During the press conference for the "Piracy Out, Competitiveness Up" campaign in Taipei (Taiwan) the chief secretary of the Ministry of Economic Affairs, Hung Shu-min said that Taiwan could be a model worth modelling for China in regard to bringing down business software piracy levels. Read Stacey Wu and Deborah Kuo's article for Focus Taiwan here.

In the Eighth Annual BSA Global Piracy Study (released last May, 2011) Taiwan scored third best in Asia. Taiwan's business software piracy rate 37 percent (2010), four percentage points lower than in 2006. Only Japan scored better (20 percent) and Singapore (34 percent) in 2010. Taiwan scored better than Hong Kong (45 percent). Taiwan's relative low piracy has probably enhanced foreign investments in research and development. China still has still a serious business computer piracy issue 78 percent in 2010.

However, between 2006 and 2010 China also reduced its business software piracy rate with four percentage points (from 82 percent in 2006 to 78 percent in 2010). So relatively China reduced business software piracy as much as Taiwan.

China's Three Experimental Gardens
But I agree that the People's Republic of China is in a unique situation where it has the opportunity to look at  a variety of Chinese communities with very different systems, and pick and choose the best from each system. I am sure Beijing is already keeping a good eye on Hong Kong, Macau and Taiwan.

The question is whether the measures that worked in Taiwan will work on the Mainland too. To name one huge difference: size. If your territory is not as humongous as China's, like Taiwan's modest size (or much smaller Singapore) each problem is easier to fix. On the island of Taiwan the local and national nearly coincide. One can argue that in China all problems are getting aggravated because the tension between the local and national interests. Taiwan's legal system, and policy is very different from that of China. But learning from each other's successes and mistakes seems a good way to make a shortcut to progress.

Do you think China can emulate Taiwan's anti-piracy system? Or do you think each system is well tuned to its unique situation and to transplant a different legal system and policies are not recommended?

Ronald Yu, lecturer University of Hong Kong wrote on personal title, via email:
"I remember that when I first went to Taiwan you could buy lots of fake goods - fake shoes, pirated recordings, etc. but it has since cleaned up a lot. I have thought, for some time, that Taiwan could act as a barometer for China's future, and if my assumption holds, perhaps China shall soon have a very clean, effective IP regime."

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Window Is Closing For Pirated Software In China: Qingdao Government Gives Example

Chinese government agencies were well known for using pirated software. By the end of May all illegal software needs to be replaced. The city of Qingdao (province Shandong) will be 10 months ahead of the central government's ban on pirated copyright. Read more here.

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Benchmarking China's IPR Protection and Enforcement

In response to China's umpteenth pledge to protect intellectual property, Mr Robert Holleyman, president of the Business Software Alliance (BSA) said: "We will know China has made real progress in reducing piracy only when software companies start seeing substantial increases in sales." Read Sewell Chan's article here.

Mr Holleyman is doing something very constructive: he is trying to bench mark China's protection and enforcement of intellectual property rights. However, he is not looking at piracy of software copyrights, but to the income of the sale of genuine software. This might be the result, but is too simple, since the sale of genuine software is dependent on more factors than IPR infringements.

Mr Holleyman should consider using the enforcement/infringement ratio, which is a bit more complex, but gives a more robust answer to the question, is China's enforcement of IPR going forwards, backwards or unchanged.

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May You Live In Interesting Times Online: Does China's Green Dam Includes Pirated Code?

May you live in interesting times on the Chinese internet: pre-installed filtering technology which is used to censor, a passionate opinion against it supported by a massive internet survey, and last but not least the very filtering software might be qualified as copyright infringement.

Of course I am talking about Green Dam: China wants its citizens to use pre-installed filtering software to avoid that they will be exposed to pornography and I assume also to texts that include words deemed a threat to the Chinese government. This censorship method China called Green Dam. Alexa Olesen of the Associated Press quoted an anonymous Chinese official saying that Green Dam is not compulsory, see here. However, I guess not pre-installing Green Wall might not be conducive for computer manufacturers that want to sell in China. Then again, Chen Weihua, reported in an unprecedented frank way 'Let's not allow the Green Dam software to block our way into the future' on China Daily about an opinion poll on Sina.com, which showed that 90 percent of the people polled will not use Green Dam, read here. By the way: to stop all unwelcome information is not feasible for any government; the higher the dam the more forceful the water will stream out through the cracks.

Now, US software maker Solid Oak Software has sent cease and desist letters to computer manufacturers Dell and Hewlett-Packard, because it alleges that the Green Wall software includes code of which the graphical user interface (GUI) has the same look and feel as Solid Oak's Cybersitter software, which would constitute copyright infringement.

Isn't it ironical that the filtering software that could be used (maybe with different technology) against copyright infringements itself might be pirated?

Read Mark Hachman's article for PCMAG.com, which links to many relevant PCMag.com articles about the same subject.

UPDATE

I was linking the expression 'May you live in interesting times' to the Wikipedia page about it. This is what Charles R. Stone has to say about it. Thanks Charles.

Charles R. Stone: "My vote for a possible Chinese origin for "May you live in interesting times," if indeed we should be looking for a Chinese source, is: 多事之秋。It's found a few times in classical histories and Ming dynasty novels, as a Google search will show. (Insert pages of footnotes.) The problem, of course, is that it's not used as an imprecation in these sources. It figuratively means something like "a season of much trouble." The step to "may you live in a season of much trouble," or "may you live in interesting times," is not a big one. In any event, it seems more plausible than "It's better to be a dog in a peaceful time than be a man in a chaotic period" as the Wikipedia link speculates."

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BSA Software Piracy Study: Taiwan 39 Percent, Ranks 23th Lowest

Business Software Allicance (BSA) publishes its 2008 study of software piracy: May 2009, Sixth Annual BSA-IDG Software 08 Piracy Study.

With 39 percent, Taiwan came in on the 23th position of the countries with the lowest software piracy, causing a 201 million US dollar loss in 2008 (215 million US dollar loss in 2007):

Percentage software piracy Taiwan

2008 39 percent

2007 40 percent

2006 41 percent

2005 43 percent

2004 43 percent

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BSA Software Piracy Study: Hong Kong 48 Percent, Ranks Average

Business Software Allicance (BSA) publishes its 2008 study of software piracy: May 2009, Sixth Annual BSA-IDG Software 08 Piracy Study.

With 48 percent, Hong Kong is a Special Administrative Region whose software piracy ranking is between a country with a low and a country with a high software piracy percentage, causing a loss of 225 million US dollar in 2008 (224 million US dollar in 2007).

 

"In Hong Kong, 2008 saw the government amend

copyright laws to make it easier for criminal

enforcement against end-user piracy and conduct

more highly publicized raids on infringing hard-disk

loaders. The extension of the government’s Genuine

Business Software Campaign (GBSC) reached 50,000

companies and increased software vendor revenues

from legalization programs."

Percentage software piracy Hong Kong SAR

2008 48 percent

2007  51 percent

2006  53 percent

2005 54 percent

2004 52 percent

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BSA Software Piracy Study: China 80 Percent; Ranks 24th Highest

Business Software Allicance (BSA) publishes its 2008 study of software piracy: May 2009, Sixth Annual BSA-IDG Software 08 Piracy Study.

With 80 percent, China came in on the 24th position of the countries with the highest software piracy, causing a loss of 6,677 billion US dollar in 2008 (6,664 billion US dollar loss in 2007):  

"China’s piracy rate has dropped 10 points since 2004, a result of more vigorous enforcement and education as well as vendor legalization programs andagreements with original equipment manufacturers(OEMs) and resellers. The government, for instance, has mandated that PC OEMs only ship PCs with legitimate operating systems."

"In China, the break up of a massive counterfeiting ring in late 2007 and the subsequent trials in 2008 set a stern anti-piracy tone for the year. Also during 2008, BSA sent out 53,000 “notice and takedown” letters to Chinese Internet Service Providers (ISPs) in an effort to counter Internet piracy. The government conducted enterprise end-user raids in numerous regions, including Jinlin, Hainan, Shanxi, Shanghai, Beijing, Xian, Wuhan, Shenyang, and Qingdao. The Chinese government also continued its efforts to ensure legal use of software in government agencies and stateowned enterprises."

Percentage software piracy People's Republic of China

2008 80 percent 

2007 82 percent

2006 82 percent

2005 86 percent

2004 90 percent

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Controversial grading of Chinese WTO compliance to IPR protection

According to the Chinese Daily foreign companies give China after fours years decent marks for WTO compliance. But there are still complaints about "rampant violations of intellectual property rights". The US Chamber of Commerce reported on this earlier.

"The report said 70% of pirated goods seized at US borders in the first half of the year originated from the Chinese mainland and Hong Kong. US and European companies lose billions of dollars a year from piracy of such goods as computer software, pharmaceuticals, electronics, movies, clothing and car parts, say foreign-trade groups."

In the Chinese Daily academic and governement adviser Zhang Hanlin of the University of International Business in Beijing gives China nontheless a grade of 95 percent for overall WTO compliance and 80 percent for its protection of intellectual property. This makes you think about the grades Zhang is giving his students when they fail a course.

"In joining the WTO, China pledged to significantly reduce the levels of counterfeiting and piracy before 2005, and Chinese officials regularly assure Washington they will step up antipiracy efforts. But foreign companies say China could do much more; of some 2,000 administrative enforcement cases dealt with by authorities in the eastern province of Jiangsu last year, only two were transferred to courts for criminal investigation, according to the US Chamber report."

Mr. Zhang thinks that one cause of the problem might be "that the responsibilities are divided among too many administrative departments."

Read more here.

Howard Winn of the International Herald Tribune wrote a piece about how China's accession to the WTO has brought about change for both China and WTO.

About Intellectual Property he wrote:

"In testimony for the Office of the U.S. Trade Representative, the U.S.-China Business Council called in August for faster progress by China on the enforcement of intellectual property and distribution rights;..."

Read more here.

More about China and the WTO on the Conglomerate blog.

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