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China steps up action against software pirates.

The Federation Against Software Theft : 21 February, 2008  (Technical Article)
80% pirate software use in China drops as government clamps down on organisations which use unlicensed products.
The news that the Chinese government is making headway in its battle against the pirates should be recognised in the West as positive news, but with important caveats, according to The Federation Against Software Theft (The Federation).

The official state media outlet Xinhua has stated that some 3,600 enterprises had come under the scanner of central and provincial governments, with over 1,100 companies being hit with penalties for using pirated software

Quoting the Supreme Peoples Court data, official Xinhua news agency said 769 Intellectual Property Right cases were handled by Chinese courts in 2006 and 1,212 offenders were prosecuted, a rise of 52.2% and 62.21% respectively, from 2005.

Commenting on the figures, John Lovelock, chief executive of The Federation, said, “We warmly welcome the news that the Chinese authorities have launched a crackdown on companies using illegal software. It is a major problem in the country with a recent survey showing that over 80 per cent of software in use in China is illegal. To put this into economic terms, a ten per cent reduction in this figure would add over $20bn to the Chinese economy.”

At the same time there has been a sharp rise in the number of firms using legal software in the recent months, with the Chinese authorities reporting a rise in the legal use of software to 2,300 in February from 1,500 in December last year.

“In real terms this equates to a 53% jump in the number of companies using legal software since the new stricter anti-piracy laws came effect in April 2006, according to the National Copyright Administration (NCA) of China,” said John Lovelock.

“However this needs to be put into context. Under attack over prevalence of piracy, China had launched a crackdown and ordered authorities to buy computers with pre-installed legitimate software. It had also stipulated that all domestic and imported computers be sold with pre-installed legitimate software to prevent piracy at source.”

He continued: “The reason why is simple: the desire of the Chinese authorities to become legitimate trading partners with the West where the rule of law - especially in the case of intellectual property - is not only respected and recognised, but enforced.

“Additionally the growth of their own creative industries will lead to an increase in IP revenue streams which they will defend vigorously. We saw the same thing happen in Japan as they became the world leader in games software development. The illegal use of software in the country dropped dramatically to around 28% today not far of the UK’s at 27%.”
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