On Friday, August 15, 2008, in an ordinary residential neighborhood, four policemen from southern China’s Huqiu Police Station in Suzhou took a 30 year old man away for questioning along with his computer.

24 hours later, the man’s father received a call from the police saying that his son had been officially detained on allegation of copyright infringement of Microsoft’s product.

2 days later, the news sent shockwaves through China’s Internet.

Ins and outs

The man arrested was Hong Lei, also known as Leilei on the Internet. Chinese netizens were stunned to find that he was the author of “Tomato Garden Windows XP”. 

As Microsoft’s most widely used and lauded operating system, Windows XP has had many privately revised versions. Computer fans have created revisions by cracking system modules, usually focused more on interface beautification, program downsizing, function optimization and tool integration. These revisions were not authorized by Microsoft, and according to Chinese laws are illegal.

Based on the original version, “Tomato Garden XP” added ornamentation to visual and audio elements including theme, desktop, button and sound, cancelled the official verification procedure, closed or removed some infrequently used programs, lifted restrictions on parts of functional modules, raised operation speed and integrated some practical tools to the system platform.

Among all revised XP versions, Tomato Garden enjoyed a top reputation—it is “the most beautiful XP”, boasting elegant and highly varied interface styles and also performs well in system stability and practicability. Its download was also number one on the list. It was estimated that since the launch of its first edition five years ago, installation had hit almost ten-million.

In 2003, Hong set up his Tomato Garden website (www.tomatolei.com) along with friends. They offered a self-made “Windows XP Kit” to revise system interfaces. This was perfectly legal, for users needed to download and install it on their existing XP systems. Subsequently however, Hong started to provide the download of “Tomato Garden Windows XP System”, which was a pirated program. Zheng Zhaohui, a friend of Hong, recalls: “I didn’t agree much with him, sensing the risk of infringement.”  

Hong included the following disclaimer on his page: “This website is solely for study and therefore does not take any legal responsibility for any resources! Please delete any resource from this site within 24 hours after download. The site strongly condemns and despises any pirate acts that benefit from using resources on this website!”

Hong perhaps trusted the statement too much. Microsoft over a five year period did not take action, and Hong had launched one new version after another. Some dealers also revised Tomato Garden, and pirated copies became a hot ticket item.

According to China Business Journal, some businessmen said Tomato Garden was the most popular software on the market; though priced at only 5 Yuan, it brought a 50% profit, on which many pirate dealers thrived. To date, there has been no evidence showing a link between Hong and such dealers, or any profit taken by him through pirated disks.

However, Tomato Garden gave Hong a fortune.

After Hong’s arrest, Zheng published an audio statement made in 2006, in which a voice presumed to be Hong’s stated that he could pocket more than 100,000 Yuan monthly by linking to business website plugs with his XP. Named plugs included EachNet and Yahoo Assistant, the former charged according to volume while the latter on a 10 Yuan-per-1,000 search basis.

Users who downloaded the system from Tomato Garden website proved the existence of the two plugs, but said they could be removed.

While Hong was in custody, the police also closed Chengdu’s Red Apple Technology Co., Ltd, Hong’s technical supporter, and froze Hong’s personal bank account which, according to his family, was valued at 1 million Yuan. Hu Gang, a renowned web business lawyer said in an interview, that Hong would probably receive 3-7 years in prison if the sale of his XP, both in number and value, was large enough to be deemed “serious” at law.

Ramifications

Five days after the case, Microsoft (China) publically stated that it had “made complaints to the National Copyright Administration and the Ministry of Public Security, which were placed high on the agenda.”

Business Software Alliance (BSA) actually carried out the complaint on behalf of Microsoft and other software companies. The complaint only named Tomato Garden.

Other similar websites quickly reacted. By August 22, among the 14 top XP revision sites, five were inaccessible, five removed all related downloads and the remaining four cancelled direct downloads; only providing links to other websites.

Suzhou police refused to give more information, saying details might be available by mid September. Criminal detention can last up to 30 days at most; the procuratorate had another seven days to decide whether to issue an arrest order. By mid September the police had not revealed anything. Sina Technology said, “Hong was arrested on September 18 under approval of the People’s Procuratorate of Suzhou,” but did not disclose the news source, while Hong’s family confirmed that he had not returned home.

As of now, Hong may have officially under arrest, facing charges.

The Chengdu Red Apple Technology Co. Ltd., which “provided technological support” to Hong, was another focus of attention. It offered server hosting for Tomato Garden and tried to package it into a “shareware platform” to reduce the infringement risk. On August 20, the entire staff of Red Apple had disappeared. There was only a hand-written sign on the company gate reading “All staff out for training.” In less than a fortnight, Red Apple’s legal representative Zhang Tianping had also been detained, for illegal profit from click ads when Red Apple provided downloads of the pirated software. 

Hong’s detention was publicized and known on the Net in less than a week, with all famous online media reporting and commenting. Hong received overwhelming support at the beginning.

By September 1, an online poll from Sina Technology had reported more than 100,000 votes and 10,000 comments. 91.16% of the surveyed said they once used, or were using a revised XP, and Tomato Garden’s market share had reached 25.18%. The result was widely quoted in reports and commentaries.

Microsoft’s prompt response was described as “high-profile, eye-catching.” There appeared on some general and IT BBS numerous posts supporting Hong and called Microsoft “bullying.” A Microsoft staff member admitted in an interview with China Business Journal that “we anticipated the impact, but the netizens’ reaction was still more than what we expected.”

Microsoft might be the first to come under an anti-monopoly investigation, it was guessed, considering China’s Anti-monopoly Law which recently came into effect. The Tomato Garden incident turned Microsoft into a target of pointed fingers, for many believed that the software giant intended to use Tomato as a deterrent and tell people in an very disguised manner that its “market share was all pirates and there was no such thing as Microsoft monopoly”.

Microsoft remained silent. Others had speculated that Tomato was a demonstration of China’s determination to implement an intellectual property strategy and strengthen copyright protection, or a victim of “internal strife” of the pirate industry.

After that, voices against piracy and Hong began to appear, and gradually took root. People’s Daily Online, the official website of People’s Daily, carried a commentary Please don’t support Tomato Garden, while Xinhua Net questioned Sina’s statistics. The most influential opinion was from Ni Guangnan, academician of the Chinese Academy of Engineering and research fellow of the Institute of Computing Technology, Chinese Academy of Sciences, who in his article called for promotion of licensed China-made software in a fight against market domination by transnational and pirate products.

Inside story surfaced

Hong’s voice recording has put the pirate industrial chain in the public eye.

The business website plugs previously mentioned have actually served as a hotbed for pirated software. They are also called rogue software; for they are automatically installed in the operation system without the user’s knowledge.

According to Hong, his monthly income was 20,000-30,000 Yuan,generated from the website, while thousands of Yuan were generated by rogue software, planted in both Tomato Garden XP and the kit to beautify the system. He also introduced the author of another XP revision into the rank of bundle plugs, and received kick-backs. In his heart he knew, “Microsoft will sure be after you if it knows you use its XP to earn money”.

Beijing News quoted an insider as saying, “Hackers all over the world have set eyes on Microsoft. Their revisions are only for pure technological thrill. Large software companies don’t care very much for such individual behavior since it doesn’t involve any commercial interest.” “But in China, malignant ad software is bundled with these revised Microsoft products and money is passed during that. It even has a clear industrial chain. This has actually hurt Microsoft’s interest.”

Yahoo and EachNet were also dragged in. Yahoo said it knew nothing. An EachNet spokesman said since the voice record was made two years earlier, EachNet had gone through many personnel changes, and knew nothing, either.

Indeed, “bulk imbedding of plugs brings ad profit by installation” has long been a trade custom. This involves three roles: ad publisher, ad agent and software author. First, an ad agent usually finds the author “upstream” to plant the ad, 0.05 Yuan each time, and then sells popup ads to customers “downstream”. Many agents or middlemen might stand in between. According to “market price”, Tomato Garden could get 0.1-0.3 Yuan for each installation, and the total sum might be over 1 million Yuan each year considering its popularity. However, it is impossible to determine exactly the length and amount Tomato Garden earned from 2006-2008, during which time, China’s Internet saw great vicissitude and rogue software rise and fall. 

Aside from rogue software, another element is the piracy dealer.

After Hong’s detention, Zheng stated openly that Hong had never sold pirated system disks, and Tomato’s popularity was a result of a “third-party bootleg company, who made Tomato Garden XP disks and sold them nationwide.” He believed that Hong was made a scapegoat. A man who took part in Tomato’s early design confessed that at the beginning, it was purely for fun, but from pressure by the illicit dealers the situation mushroomed out of control. He withdrew from Tomato Garden.

Unlike application software piracy, Tomato Garden XP is an operation system, which means that most users install from disk rather then a download from its website. Most users came to know Tomato Garden through the low-priced, readily available pirate disks rather than its website. In the record, Hong himself was shocked by the spreading of pirate disks, “I never expected so many people using it…someone told me Tomato Garden can even be found in pirate dealers in a very small county.”

The third group that might stand against the copyright holder in this anti-piracy war is the end user.

Microsoft must be very careful when trying to reclaim its territory from pirate dealers, for such an act would more often than not trigger user resentment. Tomato Garden is a classic example.  Microsoft has repeated: “We will not sue individual users, and the enforcement is too difficult and we are unable for that.” 

But the latest news on Microsoft’s official website showed that blows to pirated XP would inevitably fall on users. The company announced on October 13 that as of the 20th of that month, users of non-authentic XP, after the new version of WGA verification, would suffer a “black screen” every hour, and receives constant notice of a pirated system. This will force users into the following options: buy licensed XP, change to licensed/pirate Windows Vista, or close in whole/in part XP’s automatic update functions.

Users’ reactions to the news of Tomato Garden covered the gambit of emotion. Besides fear, there was indignation (a giant company bullying an individual), condemnation (licensed software is too expensive), disapproval (Microsoft was only seeking an excuse for possible anti-monopoly investigation), national sentiment (a transnational business dominating Chinese market) and sheer anger (Microsoft is “fostering fish and casting the net when the fish is big enough”).  
Many commentators, including academician Ni, said: “Microsoft had not been fighting pirates with full might, in the hope that pirates would elbow China-made software out of the market so Microsoft can further dominate. For Microsoft itself, its business, conducted worldwide, will not suffer much from Chinese pirates, while the real victim being Chinese software which was deprived the market totally by pirates. The Tomato Garden incident, therefore, indicates a time that Microsoft would issue “amnesty” to pirates.”

Another viewpoint questioned Microsoft from users’ experience that the popularity of Tomato Garden is for “convenience” instead of “price”. So, before launching an anti-pirate war, Microsoft should give more consideration to users’ real needs.

More interesting is the contradiction in certain commentaries. Regarding the relationship between anti-monopoly actions and Tomato Garden, a typical opinion was that Microsoft, by striking the pirate XP market share, was telling the government that “the pirate market share is not Microsoft’s market share”, so as to gain an upper hand in the question of market domination. Conversely another opinion represented by lawyer Dong Zhengwei was that the ruthlessness of the Chinese authorities’ handling of Tomato Garden is a government signal of active protection of intellectual property, in exchange for Microsoft’s cooperation in an anti-monopoly investigation.  

Link: the “Coral” case

By the end of 2007, Chen Shoufu, a teacher from Beijing Institute of Technology, was sentenced by the Shenzhen Nanshan People’s Court to three years in prison and a fine of 1.18 million Yuan for his infringement of a Tencent copyright. Chen created a program called “Coral” and hung it to Tencent’s instant messenger QQ. He profited from providing downloads of the licensed QQ, together with some ads and junk software. Coral QQ revised part of functions of the original QQ by blocking existing ads and opening functions only accessible by fee.

Installation of Coral QQ might reach 40 million. Chen has received huge support from the Net during the lawsuit, while opposition to the sentence was voiced by lawyers and experts. The case is now under appeal.

(Translated by Li Heng)