The Software Piracy Problem in China

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The Software Piracy Problem in China

1. The truth: Software piracy at issue in China.

Surprisingly, software counterfeiting has such a profitable global market that “organized criminal groups using the proceeds from software counterfeiting to pay for terrorist operations overseas”, according to Brad Smith, Microsoft general counsel international. [1] Even though most people nowadays are aware of pirated software either from various news medium, or by seeing illegal software copies distributed among friends or students in their personal PCs, it would still be a shocking fact that, in the year 2000, software companies estimated that they lost $12 billion in revenue because of counterfeiting. That's 15% of the industry's $80 billion in worldwide sales.[2]

Although software piracy is undoubtedly a global issue, people have been paying special attention to this issue in China. The truth is that, even though the piracy rate is increasing worldwide and the rate rose in 2000 to 37% from 36% in 1999, which means 37% of the software sold is estimated to be fake, the software piracy rates in China are up to 92% in 2002 according to Business Software Alliance (BSA). [3] Compare to China, in U.S. the average piracy rate by states is only 25.1%.

Software piracy has different types. BSA identifies five common types as follows.[4]

First, end user piracy. It occurs when a company employee reproduces copies of software without authorization, including using one licensed copy to install a program on multiple computers, or copying disks for installation and distribution, etc. Second, client-server overuse. It occurs when too many employees on a network are using a central copy of a program at the same time. Third, Internet piracy. This occurs when software is downloaded from the Internet where the same purchasing rules should apply to online software purchase as for those bought in traditional ways. Fourth, Hard Disk loading. It occurs when a business that sells new computers loads illegal copies of software onto the hard disks to make the purchase of the machines more attractive.

Finally, Software Counterfeiting. This type of piracy is the illegal duplication and sale of copyrighted material with the intent of directly imitating the copyrighted product. In China, most of the software piracy is conducted as the type of Software Counterfeiting. Street gangs selling pirated software can be easily seen in grey market anywhere in China.

2. Who is able to protect your software right? The government?
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