More on this later, but here are the basics as reported by the FT:
A Chinese court has ruled that Microsoft infringed a Chinese software maker’s intellectual property rights in a surprise decision that has renewed worries among foreign patent experts about China’s management of IPR disputes.
Microsoft’s use of two Chinese fonts developed by Zhongyi Electronic, a Beijing-based software company, was not covered by a licence agreement between the two, the Beijing No 1 Intermediary People’s Court said in a verdict, and therefore infringed Zhongyi’s intellectual property rights.
Once the ruling takes effect, Microsoft must stop selling all PC operating systems that use the fonts including the Chinese language editions of the second edition of Windows 98, Windows 2000, Windows XP and Windows Server 2003.
Microsoft said it believed its licence agreements with the plaintiff covered its use of the fonts in question and it would appeal against the verdict: “Microsoft respects intellectual property rights. We use third party IPs only when we have a legitimate right to do so.”
Zhongyi said the verdict had highlighted that every Chinese- language Windows operating system included Chinese intellectual property rights because the Chinese character database and Chinese language input system were developed by locals.
“It can be said that the support from the Chinese character database and the input system are a pillar for the windfall profits Microsoft is extracting from China,” Zhongyi said.
OK, obviously Microsoft will appeal this to the Beijing High Court. I find the comments regarding Microsoft’s success in China and its dependence on “locals” ridiculous; everyone knows that their success is rooted in maintaining a monopoly (ha ha), not on exploiting Chinese IP. The nationalistic language is also extremely annoying, although probably a good PR strategy. Microsoft has had image problems in China for a long time.
I don’t know enough about the case to comment on the details. I will say, though, that I would be shocked if Microsoft’s licensing guys made such a stupid mistake. Anything’s possible, but I’d bet against it.
By the way, the case involves Chinese fonts. Why does the article mention patent rights instead of copyright? Am I missing something here?