Microsoft Suffers a New China Setback

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.

Reader Comments

Strategery

November 18, 2009 7:49 PM

This is more about protecting the interests of China and Chinese companies than it is about the rule of law. All around the world, courts rule against Microsoft and other American companies all the time, yet the same rulings do not happen in the USA...I wonder why... Also, while I am angered about the rampant piracy of intellectual property in China, I have zero sympathy for Microsoft--which is anti-consumer and monopolistic. The product activation feature targets casual piracy, not the rampant piracy seen in China, for example.

2Bob

November 19, 2009 2:28 AM

Well done to the Chinese court for actually helping to enforce the intellectual property rights of the legitimate owner. Pity though that the Chinese government didn't show a similar commitment to stamping out the blatant piracy of Microsoft product piracy.

I find it intensely irritating to see the outward rush of Chinese companies submitting patents in the west in the expectation they will have their rights respected. All the while the Chinese government openly permits blatant rip offs within their borders to continue.

Is there a Chinese term for hypocrisy?

Esayas

November 23, 2009 6:19 AM

It is so weird that the Chinese court only cares about a Chinese company.they do nothing when their companies copy everything.this will furthur hurt their suitability for r&d outsorcing.India is by far better than china in inellectual property protection.sooner or later ,the Chinese will realize their position .

suresh

December 3, 2009 12:42 PM

Chine recently anouce major uplift in healthcare. There is lot to do in healthcare in Asia. They need to create a basic foundation first, Such as there is lots of talk about Hospital Information Systems in Asia. But hard to find real functionalites like drug interactions and allergy alert, health condition contraindications, key drug information etc. Where western systems can not fit, still how to achieve, visit: www.skanhealthcaresystems.info

Husin O'Bama

December 9, 2009 12:28 AM

A strong Rule of law is certainly needed to contain a rogue elephant from trampling all the small guys trying to eke a living.

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