Despite the existence of elaborate and wide legal ramifications to deter software piracy in China, the vice continues to plague the booming Asian economy. China has made a name for itself because of the rampant intellectual copyright law abuse within the country. Copyright owners are estimated to lose billions of dollars each year due to the disregard for copyright laws in China. The problem has been so persistent that it appears to be part of the Chinese technology culture. Although a few isolated violators of intellectual copyright laws in China have been arrested and prosecuted, the problem is far from dissipating. Chinese authorities have a lot more to do to make any significant impact on the copyright law problem.
Huge disparities in the sales of hardware and software made in China have been evident of late, hence raising a lot of curiosity. David Leonhardt of New York Times says that looking at the sales of hardware versus software, China is second in the hardware list whereby the national hardware expenditure is said to hit US$64.4 billion and eighth in the software industry ($5.4 billion). The difference (– US$59 billion) is too large to be ascertained since how come the country buys more hardware than software components yet the components go hand in hand. These very huge sales of hardware and very little sales of software in the Chinese electronics market have implied that China is buying its computer hardware and pirating most of its software. Research on software piracy in the Asian economic powerhouse also points to this grim fact. As Charles Freeman of the Center for Strategic and International Studies says, “it doesn’t make a whole lot of sense” for China to be in such different places on the hardware sales and software sales lists. The chart from Business Software Alliance comparing hardware sales and software sales for the biggest buyers of computer equipment makes the point nicely (Leonhardt 2010).
Business Software Alliance comparison on hardware and software sales in2009.
China has accepted to protect Intellectual rights and has consented to international conventions on protection of Intellectual property rights. Legislations have been formulated, administrative regulations and agreements on trademark, copyright and patents made to help in war against software piracy in China. China has gone to this depth in order to set a good legal framework to win the fight over piracy. Despite all these, copyright violations are common in the China and intellectual property violations are committed in surprisingly large numbers. These factors have made it clear that other approaches need to be adapted in the war against software piracy in China.
Computer software was not treated as a kind of literary work under the copyright in China until after the Berne Convention. After consenting to the convention, the State Council passed the Computer Software Protection Rules. These rules set the guidelines for the Measures of Computer Software Copyright Registration. The regulations provide a set of rules covering the definitions of various terms and the registration, examination and approval of computer software programs in China. Adherence to these regulations remains a challenge and their main contribution this far seems to be in the mitigation and handling cases that have already occurred through criminal litigations. For the programs to be wholly effective, they have to stop the crimes from happening in the first place.
As of now, both the Berne Convention and these two domestic computer regulations are co-effective in the fight against piracy in China. However, in the event of any inconsistencies, the Berne Convention prevails. The mandate of the Berne convention is more encompassing and up to the international standards, and its application more widespread in all major signatories to the antipiracy laws all over the world. The legislations have made a positive contribution to the antipiracy campaign, though their mandate seems to have been curtailed at this point. New approaches should come up so that policy makers have more effect on the impact of antipiracy laws in China. (Peter 2003)
A particular case is found on an article by David Barboza (2008). The case involved 11 men who were imprisoned in China in 2008 for counterfeiting Microsoft products. The 11 men were convicted of violating national copyright laws and participating in a sophisticated counterfeiting ring that for years manufactured and distributed pirated Microsoft software throughout the world. The software pirating men were sentenced to terms of 18 months to six and a half years in prison. The sentences were noted to be the stiffest sentences ever handed down in this type of Chinese copyright infringement case. The group was one of the biggest software counterfeiting organization ever seen that had huge sales globally, noted Microsoft. Severe punishment for offenders is one of the ways in which the Chinese government could use to slow down the exponentially high rates of piracy the Chinese counterfeiters do.
Legal specialists considered this a major breakthrough in the fight against piracy in China as it involved a joint antipiracy effort by the Federal Bureau of Investigation and the Chinese Ministry of Public Security. The group operated like a multinational organization, producing and distributing high-quality counterfeit software that was created and packaged almost identically to the real products, despite Microsoft’s antipiracy measures. The counterfeit goods were sold over the Internet and shipped all over the world.
At the time, the sentence was being passed a separate trial involving nine suspects in another city but still in China, but the verdict is yet to be reached. The groups’ case was included copying and distributing software. That group has been accused of counterfeiting Microsoft and Symantec software and distributing it worldwide. The elaborate distribution networks and the global reach of the counterfeited software makes the crime’s magnitude unfathomable to many original producers of the software targeted for piracy by copyright violators.
Legal specialists say that software pirates are becoming more advanced and that the two court cases show that China is capable of exporting high quality, fully packaged software that could easily be sold as if it were the real thing. The investigators say that even the custom officials have been fooled by the counterfeits, which contained hologram markings and Microsoft’s difficult-to-replicate “certificates of authenticity”. Counterfeiting experts say the ring appeared to be less interested in selling its products inside China, where counterfeit Microsoft software can be purchased for less money and that it sought the higher-value export market. The new dimension to the issue of counterfeit products presents a new challenge, and scatters the attention of the interest groups fighting against the vice. Measures such as better security checks for the software need to be put in place to mitigate the transformed approach to the piracy crimes. The Chinese government may not have much to offer in terms of crimes of this nature as the piracy in China is very highly sophisticated, and requires specialist technology by the related corporations to address the counterfeiting. Software companies therefore need to work hand in hand with the government agencies working in the antipiracy departments to make sure they match the technological advancements that make the culprits slip through the hands of the police.
Microsoft said that its antipiracy team had been tracking the ring since 2001. The F.B.I. began its operation, code-named Summer Solstice, in 2005, and cooperated with Chinese officials. For the fight to show better results the involvement of the technology companies is crucial and of paramount, as they have the required technology to detect the genuine and the counterfeited software, and bring the counterfeiters to justice. (Chengdu 1997)
The case at hand leaves us with many questions on the legal framework to deal with piracy. How would such a ring exist for so long in a country? Another question that may arise is why such culprits of such a crime of immense magnitude would receive such a simple sentence. Is the legal framework for dealing with software piracy sufficient? Why is the piracy so rampant in China and why China. The answers to these questions will only be best answered by comparing the legislation on piracy in other countries like the U.S and the global law at large. Though the issues on copyright laws are relatively new, and sufficient formal structures may be lacking for the handling of the same spirited fight for the genuineness of the software distributed to the end users should continue with this kind of spirit, and the resistance by the counterfeiters will eventually be eliminated. Another case in 2010, US law firm Gipson Hoffman & Pancione filed a suit against the Chinese government on allegations of distributing the pirated cyber-filtering software of the US company Solid Oak.(Mills 2010)
With regards to the questions above, we will look at the legal framework of China and the implementation of the laws. In China, the national legal framework is for protecting property in China is based on three national laws: the patent law, the copyright law, trademark law among other legislation. For implementation of the laws to enforce IPR protection an administrative system has been incorporated within the government. However, the implementation faces many challenges as all the stakeholders are not committed to the implementation. For example, the local government may be loose on some of the laws leaving loopholes on which counterfeits capitalize. The major difference in the laws of the United States and China is that the United States adheres to world trade organization standards while China does not.
American politicians and corporate executives have been pressing China for years to crack down on piracy and intellectual property rights abuses that included music, film, and expensive software products. Counterfeiting has caused some friction between American and Chinese officials, but China insists that it has made significant progress in its fight against intellectual property violators. The government sees the successful prosecution of one of the biggest software counterfeiting rings as a major breakthrough.
Most of those convicted had completed only middle school, according to court documents. However, members of the group had access to one of China’s biggest disk manufacturing companies in Shenzhen with fake licenses, court papers said. The counterfeit Microsoft software was produced using manufacturing equipment that costs millions of dollars, investigators said, and appeared in English, German, Italian, Korean, Spanish, as well as other languages. The Chinese government found warehouses filled with molding machines, gilding machines, sealing machines and air compressors. (Hile 2011)
Software piracy is rampant in China, where about 80 percent of computers are believed to use counterfeit software, according to the Business Software Alliance. Mounting pressure on the government makes the antipiracy war take gigantic leaps towards the effectively diminished use of pirated software, and the protection of intellectual property.