Posted by: Bruce Einhorn on November 18, 2009
How big of a defeat did Microsoft just suffer in China? Some observers are saying a Chinese court ruling against Microsoft won’t hurt the company, since its piracy-depressed sales in China are tiny. The Beijing court ruled on Monday that Microsoft had violated the intellectual property rights of Zhongyi Electronic, a Chinese company that designs fonts, by including the fonts in many Chinese versions of Windows. Although Microsoft will be able to continue selling Windows Vista and Windows 7, it will have to yank earlier versions of the operating system.
Big deal, says one top tech analyst; there’s so much piracy in China, Microsoft barely sells anything in the country to start with. “The majority of operating systems in the market today are illegal copies, and the ones that are Zhongyi-related have an even smaller share of the market,” Reuters quoted Edward Yu, chief executive of a China-focused technology research firm Analysys International, saying about the ruling. “So I don’t think it will have much impact on Microsoft’s business.”
Yu’s a smart guy whose firm does a lot of good work. Still, though, how do you measure the damage to the company’s brand and image in China as a result of this ruling? Assume, for the sake of argument, that the court is wrong, Microsoft is right and the company did nothing wrong. It still has suffered a big loss, as the court has muddied the waters: Microsoft more than any other American company has been pushing for China to crack down on software piracy, but now the software giant’s many critics can point to this ruling and say look, Microsoft violates IPR itself. Microsoft will appeal, so there’s a chance a higher court will overturn this ruling. In the meantime, though, Microsoft’s now in a weaker position in its endless fight against piracy in China.