There are a number of estimates of what piracy in China costs American software companies. Most are in the $2 billion to $4 billion range. It could be much more than that. China is so vast that getting hard numbers is almost impossible.
On top of software piracy, China is also known as a nation which has little regard for taking premium content like feature films and distributing it without paying studios.
Redmond can take some solace in the conviction of four software pirates who will go to prison and face fines. In a press release, the Business Software Alliance announced that “The Suzhou Huqiu District Court today delivered the verdicts on the copyright infringement case of tomatolei.com and Chengdu Gongruan Network Technology Co., Ltd., which runs the tomatolei.com Web site.”
The verdict is nice, but everyone in the US software industry knows that it is a tiny victory compared to the scope of the problem. The American government has begun to step up pressure on the Chinese to get them to honor the intellectual property rights of US firms. It is hard to see what incentive the Chinese have to be helpful. Finding and prosecuting pirates is a long and expensive process. Chinese courts can review one or two cases a year and say that they are trying their best to solve the problem.
A restless Congress may push for trade retaliation against the Chinese. Politicians know that revenue at American companies is being hurt. That, in turn, undermines the corporate tax base. Washington is in no mood to have foreign governments to allow their citizens to hurt the flow of cash to the US Treasury.
China may have one high profile case to point to, but that will not be nearly enough to quite software companies in America and their representatives in Washington.
Douglas A. McIntyre
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