Internet café fires back at Microsoft over lawsuit
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A Chinese Internet café group being sued by Microsoft for using pirated software is accusing the US firm of attempting to shore up money in its intellectual property lawsuit.
The accusation comes about two weeks after Microsoft said it would nearly triple its compensation claim in regard to the café group's use of pirated Windows operating systems, bumping the damages it sought to 1.58 million yuan ($231,000).
The eight Tonecan cafés are located in Dongguan, Guangdong Province, and remain open. Their owner, Huang Peihong, has denied the accusations, saying his cafés have been using legal copies of Windows. However, he refused to disclose the purchase details of the software.
Originally asking for 600,000 yuan, Microsoft raised its claim May 11, one day before the court was scheduled to begin hearing the case. As a result, the hearing was delayed and hasn't been given a new date.
Huang, who is also the deputy director of the Dongguan Internet Café Association, subsequently accused Microsoft of being "immoral" by "making use of the copyright issue" as a means to make money.
"What Microsoft also asked us to do is to install the Professional edition of the Windows system, not the Home edition. That means we have to pay twice as much, even though there would be some forms of discounts," Huang said.
Prices for the Windows XP system are no longer available on the Microsoft online store, but prices for its latest Windows 7 system vary from $79.95 to $319.99 in the US.
In China, the prices for Windows 7 range from 399 yuan ($58) to 2,460 yuan ($360).
There are more than 1,400 computers at all eight cafés combined.
But there is the potential for much farther-reaching implications from the lawsuit, and the fallout could spread throughout the entire country.
If the court rules in Microsoft's favor, the total royalties owed to the software giant could top 120 million yuan in Dongguan alone, according to reports.
Tonecan is being backed by a number of other Internet café associations in the country, with one such company saying in a letter that "We are not against installing authorized operating systems. But the prices should be reasonable so that the whole industry can accept them."
Microsoft China said in a statement Thursday to the Global Times that "We will not disclose or comment on the case due to the ongoing proceedings by the court."
The latest accusations out of China came a day after Microsoft Chief Executive Steve Ballmer said Wednesday that China's "weak enforcement of copyright laws has undermined revenues."
Only 1 percent of Microsoft's revenue comes from China, Ballmer said.
During two days of major talks between high-ranking Chinese and US officials this week in Beijing, US Trade Representative Ron Kirk said "any progress from China in IPR (intellectual property right) protection and market access barriers could be more important than yuan reforms."
