Microsoft hits back in CD piracy battle

By Adam Gifford

Microsoft investigators are hunting for several CD counterfeiting operations in New Zealand.

Ron Eckstrom, a Microsoft corporate attorney, says there has been an upsurge in counterfeiting and pirated software since the Government removed parallel importing restrictions last year.

"We have intelligence which suggests there are four operations in New Zealand which have more than 500 CD-r burners each and we are working with other industry bodies to track these people down," Mr Eckstrom said.

More than 70,000 blank CDs were sold here every month, which Mr Eckstrom said was more than needed for legitimate back-up purposes.

But Pat Pilcher, research manager for International Data Corporation, said the extent that use was illegitimate "is up for grabs."

"The extent of piracy in New Zealand is hard to nail down."

In the past year, Microsoft has actioned four cases against firms using unlicensed software and eight cases against dealers selling pirate CDs or preloaded software. There were 17 pending cases and 20 active investigations.

Mr Eckstrom said most cases were settled in the course of a trial, with people agreeing to pay damages to Microsoft.

This money goes to the Microsoft Foundation to distribute software to community and education groups.

The foundation this week donated $41,000 in software for distribution through the McKenzie Trust and $59,000 in software and support to the Development Resource Centre, which provides training and consultancy services on development issues.

Mr Eckstrom said Customs seizures of counterfeit software had more than doubled in the past year.

Microsoft had provided help in training for Customs officers in key centres.

In two separate actions last week, officers seized copies of Office 2000 software and tens of thousands of dollars worth of counterfeit Microsoft mice.

"This is only the tip of the iceberg," Mr Eckstrom said.

"Our market intelligence shows the amount of counterfeit software coming though since the introduction of parallel importing has increased substantially," he said.

Microsoft will survey shops nationwide to measure how much more pirate software is on shelves compared with a year ago. All legitimate software, including that preloaded on to PCs, should include manuals and licence certificates.

IDC's Mr Pilcher said CD-r based piracy had become a more accessible proposition in the past two or three years as CD burners and blanks had fallen in price.

"There will always be a demand for cheap software.

"There's a couple of ways for companies to counter piracy - make their software cheaper or bust all producers.

"Neither option is particularly realistic."

Mr Pilcher said the best advice was to always buy software from a reputable source "because ignorance is not an excuse if you're caught with bootleg software".