Microsoft's war on piracy offers a wise lesson

09:36, May 07, 2010      

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Two weeks ago, Microsoft for the first time took a large Chinesecompany to court over copyright infringement of its software, and won compensation of 2.17 million yuan ($317,900).

Since its entrance into the Chinese market in 1992, Microsoft has been searching for effective anti-piracy measures. Now it has built an integrated anti-piracy network, including law offices, Microsoft agents and anti-piracy organizations in local governments. The company reportedly earns 80 percent of its income in China from anti-piracy actions.

Piracy bothers not only global business giants like Microsoft, but also domestic enterprises. In a bid to build a mature business environment in China, all indigenous companies should learn from Microsoft's ironhanded measures to crack down on rampant piracy.

Counterfeits are everywhere in China. Passing by crossovers, one sees vendors peddling pirated books and DVDs at cheap prices. Walking in parks, one sees men in fake Nike shoes. Browsing online, one finds Web shops selling copycat watches, cameras and handbags. Pirated products ostensibly help numerous rags-to-rich people, but essentially undermine the nucleus of the Chinese economy.

Take China's stagnant animation industry. Pleasant Goat and Big Big Wolf was one of the few successful cartoon films in recent years.

However, 90 percent of the film's derivatives like toys and schoolbags are pirated copies. Only one-fifth of the profits derived from such goods went to the original producer, Creative Power Entertaining Company. The outcome is ludicrous: Pirates operating at low cost are much more competitive, and business teams with originality are on the verge of being squeezed out of the market.

What's worse, innovation, as the key motivation of market prosperity, is being stifled by piracy. After crowding out the original producers, pirates cannot sustain their businesses either. No one can grow strong by relying on pilfering. In this era of globalization, companies have to have unique competency to survive. The jungle law of piracy, if left uncurbed, will ultimately destroy the backbone of the entire Chinese economy.

Some Chinese entrepreneurs have begun to take actions. Last year, one of China's major Internet portals, Sohu, founded the China Online Video Anti-piracy Association, and spent $5 million to launch the International Copyright Purchase Fund.

Recently, the largest Asian online retailer, Taobao, joined hands with 27 well-known publishing houses to crack down on pirated books.

Nevertheless, the copyright consciousness of many Chinese enterprises is still fragile. A number of enterprises ignore copycats of their products, due to the potential costs of pursuing compensation. Some don't know what to do at all.

As Microsoft wages its anti-piracy battles in China, domestic firms should learn from its determination and follow the company's lead.

Source: Global Times
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