Microsoft Versus
Dissecting Microsoft | Directory

Microsoft & Piracy

"I'd say that of the world's economies, there's more that believe in intellectual property today than ever. There are fewer communists in the world today than there were. There are some new modern-day sort of communists who want to get rid of the incentive for musicians and moviemakers and software makers under various guises. They don't think that those incentives should exist." - Bill Gates, CNet Interview, 5 Jan 2005.

At one time "pirates" made us think first of thieves travelling the seas in search of vessels of wealth to board, kill, and steal. Today Microsoft® would like you to first think of similar people stealing software over the internet and with CDs. While use of the term piracy is successful from a marketing point of view, it's somewhat inappropriate. Today's "pirates" are mostly people carelessly copying intellectual property without regard to restrictions imposed by the copyright owner. Piracy is hardly theft and murder on the high seas, and very rarely is it a sole means of income or a way of life. Microsoft has anyway popularized the term piracy to create a harshly negative image on those who copy software against the wishes of the copyright owner.

In Dowling v. United States the U.S. Supreme Court determined "that interference with copyright does not easily equate with theft, conversion, or fraud... The infringer invades a statutorily defined province guaranteed to the copyright holder alone. But he does not assume physical control over the copyright; nor does he wholly deprive its owner of its use. While one may colloquially link infringement with some general notion of wrongful appropriation, infringement plainly implicates a more complex set of property interests than does run-of-the-mill theft, conversion, or fraud."

To be clear, intellectual property rights are an important concept in our society. They give creators a temporary means of profit, thereby creating a motivation and ability to create. At the same time the expiration of copyright ownership is necessary for the public's benefit. Without a wealth of public domain content, far less new content could be created, as much new work is growth on the past.

Much of Microsoft's initial growth in the late 1970's and early 80's came at the expense of their intellectual property. While MS-DOS came with many computers, use of Windows spread relatively quickly due to rampant illegal copying. Not many complaints, however, were heard from Redmond, as the small company needed a larger user base.

Then in the 90's it became well known that the majority of China's software was illegally copied. Bill Gates said, "Although about 3 million computers get sold every year in China, but people don't pay for the software... Someday they will, though. As long as they are going to steal it, we want them to steal ours. They'll get sort of addicted, and then we'll somehow figure out how to collect sometime in the next decade." (Grice, Corey and Junnarkar, Sandeep. "Gates, Buffett a bit bearish." C|Net 2 July 1998) Yet again, almost nothing was done by Microsoft to end the activities. They waited for the Chinese to get hooked on their products. Then in the following decade they worked with the U.S. and organizations such as the WTO to incur penalties for pirating, knowing that those who rely on their software will likely make purchases for upgrades and other related products in the future. Once the customer's hooked on a product it's an easier sale.

Today, however, with a large user base, things are much different. Microsoft works hard at preventing "piracy" and convicting the "pirates." But surprisingly they themselves were convicted of software piracy in 2001 by a French court and ordered to pay a fine. The news wasn't carried by any major news sources at the time. After termination of a contract in 1995, Microsoft was required to remove Syn'X Relief's intellectual property from their SoftImage 3D product, aquired with Microsoft's purchase of the SoftImage company. Syn'X, fighting into bankruptcy and going out of business, filed suit in a French court claiming not all of the intellectual property was removed by Microsoft. In 2001 the French court agreed and issued a verdict fining Microsoft.

It's ironic that a company working so hard to educate the public and lobby the government to impede intellectual property theft would themselves be convicted of the crime. In this case the owners were able to determine their property was not removed when required. In how many other instances has the owner not been aware or able to determine that Microsoft has illegally included their intellectual property in software?
Copyright © 2004-2007 Matthew Schwartz