Editor's note:

China is now paying unprecedented high attention to the legality of software, and enterprises, through research and investigation, become increasingly aware of the value of authentic software, which has begun to receive its due respect. The Chinese government has explicitly rendered its support to enterprises for the copyrighting of software, and has promised that at the end of 2007, the headquarters of national enterprise groups and large state-owned enterprises will all use authentic software. In the event of "Norton miss-killed Windows XP system files" that happened recently, losses occurred to many domestic enterprises and personal users. Some of them are suing Symantec for compensating their losses. But pirated software users have no legal means to turn to. From this point, we can see that using authentic software also has benefits for personal users.  

Against this background, the promotion of using authentic software has naturally become an important project launched by Microsoft in China, as well as a principal matter of Microsoft Corporation (China)'s IP policy. One of the biggest projects to be implemented by Microsoft in China this year is GSI (Genuine Software Initiatives).

On May 18, 2007, an initiation ceremony for the "Model City for Protecting Copyrights" was held in Kunshan, Jiangsu Province. As the industrial representative, a Microsoft official was invited to the ceremony. Kang Rusong, General Manager of the Genuine Software Division of Microsoft Corporation (China), appeared at the ceremony and addressed the gathering on behalf of software enterprises to congratulate the model city construction. This is another example of cooperation by Microsoft with local governments in IP protection throughout the country, and another measure taken by the Genuine Software Division of Microsoft Corporation (China) Corporation since its establishment. It symbolizes the increasing maturity of Microsoft's genuine copyright promotion policy. Prior to this, Microsoft also actively cooperated with the local governments in Tianjin, Shanghai, Chengdu, Chongqing, Dalian, Hangzhou, Nanjing, Wuhan and Luoyang on the protection of IP works.

As for why Kunshan chose Microsoft as its cooperative partner in the construction of the model city, Mr. Li Zhong, director of the KunShan Cultural Broadcasting and Television Bureau, said that more accurately, Kunshan and Microsoft chose each other. Kunshan's choice of Microsoft is due to the latter's influence as the biggest software manufacturer in the world, while Microsoft's choice of Kunshan is based on the city's progressive role countrywide as a "model city in protecting copyrights".     

At the moment, nearly 5,000 foreign enterprises have registered in Kunshan. Together with the domestically funded enterprises already starting production, the total number of enterprises here exceeds 20,000. The rapid development of the IT industrial base and the favorable investment environment in Kunshan has attracted numerous enterprises at home and abroad. The Kunshan City Government has expressed that it will intensify its efforts to promote the use of authentic software by these enterprises.  

On the afternoon of May 18, Genuine Software Division of Microsoft Corporation (China) held a media conference in Kunshan. Nine media organizations attended, including China Intellectual Property, China Computer, Science & Technology Daily, China Intellectual Property News, and China High-Tech Industry Herald. At the meeting, Mr. Kang introduced in detail Microsoft's GSI policy in China.

The Genuine Software Division of Microsoft Corporation (China) was established at the end of 2005. It is the only overseas division of genuine software besides Microsoft's Headquarters in the United States. The Division was formally unveiled to the media on April 4 of last year, and the initiation of a copyright value-added plan was declared in China. Now after more than one year, the number of staff members of the Division has increased from 2 to 6. Mr. Kang said, "GSI shall not be limited to our Division. It actually involves all departments of Microsoft and the work of almost every department, and even every member of Microsoft is related to copyright and intellectual property protection. Every department of Microsoft attaches high importance to the initiatives. This is not the work for simply one department."

On the road to software copyrighting, Microsoft implements its policy from three criteria: at the industrial level, Microsoft will carry out educational activities for the value of IP together with governmental departments and the software industry; with regards to partners, Microsoft is dedicated to cooperating with local partners to make innovations and promote IP's progress; and concerning end-users, Microsoft will continue providing more high value services to the users of authentic software, so that they will better understand and experience the value of authentic software authorized by Microsoft. To put it more vividly, Microsoft's policy on IP protection will be implemented by the three "E's": Education, Engineer and Enforcement.

China's Policy Is Favorable for the Promotion of Authentic Software

There was a strong demand for IP protection in China's software industry in 2006. The demand received much attention and concern from high ranking officials and the industry. In the Work Report for the 4th Plenary Session of the 10th National People's Congress, Premier Wen Jiabao pointed out: "our country has entered into a historical period during which we must rely on scientific and technological progress and innovation to promote economic development, and must give a strategic priority to scientific and technological development…we must press ahead with the building of a national innovation system, speed up the establishment of a technological innovation system combining production, teaching and research, with enterprises as main players and the market as a guiding force, and establish a self-innovation system structure." 

At the conference on "Enterprises' IPR Protection and Proprietary Innovation" held on Feb. 23, vice premier Wu Yi stressed that proprietary innovation would be baseless in the absence of IPR protection, and only independent innovation would promote the continuous and healthy development of the entire software industry.

Over 300 domestic and foreign enterprises attending the meeting jointly signed the "Proposal of Enterprises' Use of Authentic Software", which promised and proposed that enterprises all over China support, through concrete actions, the Chinese government's efforts for the protection of software IPR and for the encouragement of proprietary innovation. In this year's China High-level Forum on Intellectual Property Rights Protection, Wu Yi said that the task for 2007 is to consolidate the achievements and to ensure that the headquarters of central enterprise groups and large state-owned enterprises under their leadership use authentic software, and meanwhile, promote other large state-owned enterprises supervised by the State-owned Assets Supervision and Administration Commission, and the enterprises for all ownerships to use authentic software.

As can be seen from the government's attitude and voices, the year of 2006 saw an important turning point for China's IPR protection, a symbol that the working focus of China's IPR protection has been shifted from the government to enterprises that really play essential roles in industrial development. Enterprises are the main players in China's economy. In order to achieve the real proprietary innovation of China's science and technology, our enterprises must be fully aware of the importance of IPR protection, and take the initiative to use legally authorized software.

Echoing the government's call and the appeal by China's software industry, Microsoft makes concerted efforts with the Chinese government and the industry in proposing and promoting IPR protection and the use of authentic software.
 
Mr. Kang maintained that Microsoft is answering the call of the Chinese government to promote innovation. Premier Wen's speech on "promoting economic development by scientific and technological progress and innovation" represents a good opportunity for Microsoft. It can help the Chinese government to realize this goal. What really pleases Microsoft's staff is that their company's value is recognized in China, and that their company will help China realize its goal of innovation.   

The progress of copyrighting was another breakthrough in the past year's copyright protection. On March 30 of 2006, MII, NCAC and Ministry of Commerce jointly issued a notice on the pre-installation of authentic operating systems on computers. Now, the Chinese government requires that all OEMs, both Chinese and foreign, pre-install authentic software on the computers that they make in China. This is a great step forward in the eyes of both Microsoft and all software manufacturers. Governmental procurement was addressed in the notice titled "Government Departments must Procure Computers Pre-installed with Genuine Operating System" promulgated on March 30 of last year. At the end of the last November, "Copyrighting Engineering of Computer Software" was formally launched in Beijing. Another important event is the promulgation of the "Executive Plan for Promoting Enterprises' Use of Authentic Software" co-drafted by nine ministries and commissions under the State Council on May 18 last year, which shows the special wisdom of the Chinese government in this area. Innovation is of pivotal importance for China's development, and is another reason for IPR protection.
 
We often come across the phrase "BRIC Countries", which refers to Brazil, Russia, India and China. Many enterprises and governments focus their attention on these four big countries. But it is a pity that many foreign representatives are blind to China's development, and are ignorant of the present situation in China. We are so pleased to see that China has such advanced ideas on IPR protection, and that no other country has ever given as much support to IPR protection as China.  

A Key Formula for IT Companies: IT = IP + IQ

Speaking of the importance of IPR protection, Mr. Kang put forward a formula: IT = IP + IQ. He said that it is an essential formula for IT companies, especially for software companies. IQ refers to the intelligence quotient, signifying that talent is indispensable. The intelligence of mankind is of utmost significance in this information technology age. IP stands for intellectual property, which is another task if IT companies want to achieve success. IP is the technical core for companies. When a company has talents, what it wants to have next is IP protection. Moreover, IP shall be an important issue not only for IT companies, but also for all enterprises. It will encourage the government, the industry and local partners to make innovations and promote IP protection. Only in this way can we better promote proprietary innovation and guarantee the continuous and healthy development of Chinese software industry.

Quotation from a research analyst:

"The formula "IT = IP + IQ" is not merely applicable to the IT industry. All hi-tech industries and knowledge-based industries may apply it. For example, research and consultation industries are also faced with problems of pirated reports. If our country and the entire society take a proper attitude toward IP, and everyone uses only authentic software and authentic reports, our entire software industry and the tertiary industries will both achieve greater development, and China's economic level will be elevated to a large height." —— by Yang Bin, vice president of Analysis International. 

Three "E's" on IP Protection: Education, Engineer and Enforcement

On IP protection, Microsoft has as a strategy three "E's": Education, Engineer and Enforcement. Mr. Kang said that education should be given prime emphasis. Students from senior high schools, colleges and research institutes should all know the value of intellectual property. In this way, they can help China, their employers and themselves to make improvement. Mere production is not enough. In the production field, China was formerly characterized by manufacturing cheap products. However, currently there are many other countries with cheaper products. Does China have any other advantages other than cheap production? Yes. China has talents and intellectual property which are more valuable.

On education, Microsoft has carried out many activities that surely correspond to the government's requirements. A majority of the IP policies implemented in China by Microsoft is oriented toward education. The agreement just signed with Kunshan Municipal Government is also based on the government's education promotional work. In addition, from May 1st to June 30, 2007 and in 275 shops in Beijing, Shanghai and Guangzhou, Microsoft and five computer manufacturers including Lenovo, Tongfang and HP, will inform consumers of how to identify authentic software. Microsoft has also provided training to salesmen so that they can tell consumers how to identify authentic software. Education actually has a broader meaning. Microsoft actively cooperates with the government, enterprises and industries in this regard. It has also made many advertisements on copyrighting in the last year.     

There are also some conventional activities that have been carried out. Microsoft was once asked by Chaoyang District to help conduct an activity. As many educators say "education shall start with babies",  children should also know the value of intellectual property. 

It is also Microsoft's expectation to increase its investment in engineering to help customers, consumers and partners to avoid the harm of pirated software, and to improve the management of software assets and their authorization.  

Education is also involved in Microsoft's policy of assisting law enforcement. For example, many law-enforcement organs shall know how to identify authentic software, and judicial organs shall know how to differentiate pirated software and to prepare evidence. In this regard, Microsoft will, despite the time and energy spent, help them to understand what authentic software is and how to identify it, so that they can enforce the law more efficiently from the perspective of pre-installation or for use in enterprises. In addition, Microsoft also assists the government and the law-enforcement departments concerned in taking measures against pirated software, lest the consumers suffer any loss. It expects that these actions will help bring a fair market competition environment for legitimate sellers.    

Value of Authentic Software: Safety, Stability and Reputation

Mr. Kang said that the value of authentic software was represented by three factors: safety, stability and reputation. He also gave an example of a friend of his who wrongly bought pirated Vista software, and later detected the Trojan horse virus in it. The safety problem encountered by his friend was caused by the pirated software. Secondly, stability of software is also very important. Only authentic software can ensure the high stability of a computer system. And thirdly, reputation is a word with Chinese characteristics. Authentic software will help the users win fine reputation. 

As a matter of fact, only those users using authentic software will obtain higher values, including stronger safety and reliability, and consequently, authentic software will help maintain and improve the user's reputation. In this regard, Microsoft promises that those using authentic software legally authorized by Microsoft will not only conveniently, timely and continuously get safety updates and the right to use the latest security software from Microsoft, so as to guarantee the safe running of the information system, but also enjoy all-around product support and services from Microsoft, so as to ensure the high reliability and stability of the information system. Everyone knows that software is also an important and valuable asset for enterprises. Using authentic software will also promote the enterprise's image and be advantageous to the enterprise's long-term development.

Microsoft's Plan of Copyrighting

During this year, Microsoft's big project is related to SAM - software assets management. ISO issued a new standard named "process of software assets management" (ISO19770) last year. Many enterprises still don't consider software as being assets. Therefore SAM is very important for them. It will tell them that the software itself is an asset, and awaits management.

As for problems with the difficulty in popularizing authentic software in the middle and western parts of China due to the relatively backward development status in these areas, Mr. Kang answered that it is subject to the government's efforts and the consumers' consciousness to popularize the value of authentic software. Microsoft has also initiated many projects for public promotion, such as the "Unlimited Potential" and "3-dollar Student Innovation Suite".

In 2007, Microsoft sells an innovation suite to students for the price of 3 dollars. In the next five years, Microsoft will invest US 250 million to give financial aid to students. In response to this project, Microsoft has marketed the innovation suite. The government will buy computers for these students as a valuable study tool, especially for mathematics.

Microsoft will also set forth another plan called "Unlimited Potential" this year, which will bring sustainable social economic opportunity for the 5 billion people living in less developed countries. The plan will be implemented through technical training and cooperation to reform the education system, promote local innovation and create employment chances in these areas. The emphasis will be placed upon three criteria: education, innovation, and the chances of employment and economic development.