After a trial lasting almost 12 months, Microsoft Corporation has reached a settlement to end its landmark lawsuit against a Chinese internet café chain it accused of violating the copyright of its Windows operating system.
Tonecan Network Communication, the biggest internet café operator in Dongguan, Guangdong, agreed to pay the software colossus an undisclosed amount as compensation and promised to use genuine Microsoft software in future.
Qu Miao of King & Wood, the law firm that acted for Microsoft in the case, said that the legal dispute had had “considerable social impact”. “This is Microsoft’s first lawsuit against an internet café in China and the first civil case for copyright infringement of leased computer software,” she said.
Founded in 2006, Tonecan operates a network of eight internet cafés in Dongguan and controls 10 holding companies that provide internet access services.
Microsoft, the world’s largest software company, began talks with Tonecan in 2008 in an attempt to persuade it to use genuine software in its cafés. It made little progress despite offering preferential pricing on its products, a five-year programme in which Tonecan would gradually become compliant and other inducements.
In April 2009, following a complaint from Microsoft, the Guangdong Province Copyright Administration Bureau and Dongguan’s culture enforcement authority raided Tonecan’s internet cafés and found 1,401 personal computers installed with illegal software.
Microsoft filed its suit against Tonecan in December 2009 at the Dongguan Intermediate People’s Court, claiming for total compensation worth RMB1.5 million.
Yu Weidong, general manager for intellectual property rights at Microsoft China, said the settlement with Tonecan “casts positive light on the course of intellectual property rights protection in China”.
The Business Software Alliance, a software industry trade association headquartered in Washington, values the total amount of illegally used software in China in 2009 at US$7.6 billion, an increase of US$900 million over 2008.