China Cracks Down on Software Piracy by Government
Washington, April 7 (Bloomberg) -- China ordered all government offices to stop using pirated software, a move the U.S. and software companies have sought for years that could ease the Asian country's entry into the World Trade Organization. ''This is a milestone in China's efforts to increase intellectual property protection,'' said U.S. Trade Representative Charlene Barshefsky in a statement announcing the move.
The decree, which stands to benefit Microsoft Corp., Systems Inc., Novell Inc. and other software companies, comes as the U.S. and China are reaching a crucial point in negotiations over an agreement clearing the way for China to enter the WTO. It covers all ministries and government agencies, according to the USTR, which couldn't say whether government-run companies would be affected.
The action is similar to recent orders by the governments of Paraguay, Thailand, Turkey, the Philippines, South Korea, and Jordan, the USTR said. The U.S. itself took the same action six months ago, Barshefsky said.
Whether the order will translate into more software being sold and less being stolen remains to be seen, said Nancy Anderson, a Microsoft senior corporate attorney. ''The implementation of these orders is really the key,'' she said.
Software companies are generally eager to see results. ''We look to the Chinese government to establish comprehensive procurement and software management practices that create the structure necessary for the directive to succeed,'' said Anne Gavin, a spokeswoman for the Business Software Alliance.
The alliance, which represents Microsoft and other companies such as Lotus Development Corp., said China has a 96 percent piracy rate, which cost companies more than $1 billion in missed sales in 1997.
While software piracy is a major concern for the U.S., tackling this problem alone won't satisfy trade negotiators who remain concerned about market access in China for cotton, farm equipment, banking, and other goods and services. ''A flurry of last minute concessions is typical of this kind of negotiation,'' said Gary Edson, a former USTR general counsel. ''It remains to be seen whether the totality of what China is committing to is sufficient to justify accession to the WTO.''
According to the Commerce Department, U.S. software companies are projected to have $116.9 billion in export revenue by 2001. ''These laws don't just protect American products,'' said Commerce Secretary William Daley in a statement. ''They create an environment that allows other countries to develop vibrant, creative industries -- software inventors, musicians, moviemakers and book publishers.''
Those kinds of businesses require copyright protection to flourish, Daley said. ''Time and effort will only be invested in creating these works if the creators are protected against pirates who copy the products and then steal the customers,'' he said.
Microsoft shares fell 3/4 to 93 5/16. |
