Microsoft Commends Chinese Court in Sentencing Ringleaders of World’s Largest Software Counterfeiting Syndicate

REDMOND, Wash. — Dec. 31, 2008 — The Futian People’s Court in Shenzhen, China, handed down sentences to 11 ringleaders of the world’s largest software counterfeiting syndicate today. The sentences, ranging from 1.5 to 6.5 years, include the longest sentences handed down for this type of crime in China’s history. Based in the southern China province of Guangdong, members of the syndicate were arrested by Chinese authorities in July 2007, following an international investigation led by China’s Public Security Bureau (PSB) and the FBI. Microsoft and hundreds of Microsoft customers and partners also provided information which assisted in the investigation.

The 11 accused were part of a criminal syndicate responsible for manufacturing and distributing more than an estimated $2 billion (U.S.) worth of high-quality counterfeit Microsoft software. The counterfeit software, found in 36 countries and on five continents, contained fake versions of 19 of Microsoft’s most popular products and was produced in at least 11 languages.

“Microsoft greatly appreciates the work of China’s PSB and the FBI in taking strong enforcement action against this global software counterfeiting syndicate,” said David Finn, associate general counsel for Worldwide Anti-Piracy and Anti-Counterfeiting at Microsoft. “Unfortunately, software counterfeiting is a global, illegal business without borders. Criminals may be on the other side of the globe and may not even speak the same language, but they prey upon customers and partners all over the world. This case is a testament to the importance of Microsoft’s commitment to close collaboration with government bodies and local law enforcement agencies around the world to bring these criminals to justice, wherever they may be.”

“Software piracy negatively impacts local economic growth, stifling innovation, taking business opportunity away from legitimate resale channels and putting consumers and partners at risk. Enforcement of intellectual property rights is critical to fostering an environment of innovation and fair competition,” said Fengming Liu, vice president of Microsoft Greater China Region. “Over the years, Microsoft has been working closely with the Chinese government to promote intellectual property rights. Thanks to the actions of the Chinese government, we have seen a significant improvement in the environment for intellectual property rights in China. Moving forward, we will continue to work with the relevant authorities in China to ensure that counterfeit software does not undermine the development of China’s knowledge economy.”

“This case is also a strong demonstration of the improvement in criminal law legislation and enforcement of intellectual property rights in China,” said Zhao Bingzhi, president of the Criminal Law Research Committee of the China Law Society and vice president of the China Group of the International Association of Penal Law.

Evidence provided by Microsoft customers through the Microsoft piracy reporting tool proved to be essential in tracking down this criminal syndicate. Tens of thousands of customers used Microsoft’s anti-piracy technology in Windows Genuine Advantage to identify the software they were using as fake. In addition, more than 100 Microsoft resellers played a key part in helping to trace the counterfeit software and provided physical evidence critical to building the case, such as e-mail messages, invoices and payment slips.

“Customs administrations around the world have seized thousands of counterfeit Microsoft software produced by criminal syndicates,” said Christophe Zimmermann, the coordinator of the fight against counterfeiting and piracy at the World Customs Organization. “The action today by the court in China sends a very clear message to counterfeiters that governments around the world are serious about stopping this form of criminality and are willing to step forward to protect their citizens from the harm caused by counterfeit goods.”

The Microsoft Genuine Software Initiative

Microsoft’s collaboration with government and law enforcement is part of the company’s global efforts to combat software piracy through its Genuine Software Initiative. Microsoft launched the Genuine Software Initiative in 2006, and since then it has intensified its efforts to protect customers and channel partners from the risks of counterfeit software through an increased focus on education, engineering and enforcement. More information about Microsoft’s Genuine Software Initiative is available at http://www.microsoft.com/genuine.

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

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