Microsoft has been ordered by a Chinese court to stop selling versions of its Windows operating systems that include fonts designed by a local company, citing a violation of licensing agreements.
The ruling, issued by Beijing's No 1 Intermediate People's Court on Monday, may signal a new challenge for international and domestic software makers struggling with piracy in China - newly assertive local firms ready to take their own intellectual property claims to court.
In its ruling, the court said Microsoft violated the scope of licensing agreements between it and a Chinese technology company, Zhongyi Electronic, which designs Chinese character fonts.
Microsoft will have to stop selling the Chinese versions of its Windows 98, 2000, 2003 and Windows XP, according to the court. It is unclear when the ruling will take effect or how many copies are affected.
Microsoft said it will appeal the ruling. "Microsoft respects intellectual property rights. We use third party IPs only when we have a legitimate right to do so," the firm said in a statement.
Analysts said the ruling is unlikely to affect Microsoft's long-term business outlook as only a small percentage of its total revenue comes from business in China.
"The majority of operating systems in the market today are illegal copies, and the ones that are Zhongyi-related have an even smaller share of the market," said Edward Yu, chief executive of a China-focused technology research firm Analysys International. "So I don't think it will have much impact on Microsoft's business."
China has long been the target for foreign firms seeking to protect their intellectual property. And China, under pressure from the US government and the European Union, has increased enforcement of intellectual property laws.
Microsoft has faced its own issues at the hands of Chinese software pirates. In August, a Chinese court jailed four people for spreading their bootleg "Tomato Garden" version of Microsoft's Windows XP program, in what the Xinhua news agency called the nation's biggest software piracy case.
Reuters