Taking Down the Pirates

David Finn
David Finn, Microsoft's lead anti-piracy lawyer, is encouraged by changing law enforcement attitudes toward software theft.
In a February speech before the 4th Global Conference on Combating Counterfeiting and Piracy in Dubai, Microsoft's David Finn noted that the recent four-year prison sentence for Huang Jer-sheng in Taiwan marked the culmination of a six-year probe into software piracy. That undertaking, a joint effort between Microsoft and various law enforcement agencies, shut down a $900 million global piracy syndicate and led to the prosecutions of dozens of people in several countries. Authorities say the ring, based in Taiwan and southern China, produced counterfeit versions of 21 Microsoft products in seven languages and distributed them in 600 cities and 22 countries.

Authorities believe that at its peak, the ring produced 90 percent of the high-quality counterfeit Microsoft software products that were seized by law enforcement or test-purchased by Microsoft investigators. (A $2 billion piracy ring broken up last year in southern China was a different -- and ongoing-case; see "The Chinese Connection," November 2007). Finn, Microsoft's associate general counsel for worldwide anti-piracy and anti-counterfeiting, spoke with RCP about the recently concluded case by telephone from his Paris office.

Are you satisfied with the sentences in Taiwan and elsewhere?
I'm extremely encouraged that law enforcement more and more around the world is recognizing the importance of prosecuting serious criminals who manufacture and sell counterfeits. If you had asked me this question eight years ago, my answer would be a much less optimistic one. What we're seeing, increasingly, is law enforcement holding people accountable. The vast majority of people who, I think, are using counterfeit didn't intend to buy counterfeit and they're not happy about using counterfeit.

Was there a dip in global piracy between when this ring was broken up and when the China syndicate spun up?
Yes, in a number of countries, piracy rates are coming down. Unfortunately, one of the realities is that when one group of criminals is successful and is taken out, other groups of criminals see an opportunity and try to capitalize.

Certainly, I would say that since the China group was taken out, we have again seen a drop in the availability of the high-quality counterfeits. But I never underestimate the sophistication and the lengths and abilities of the criminal element to emerge when there's an opening.

About how large is Microsoft's anti-piracy operation?
On investigation, intelligence collection, support of prosecutors, we spend in the tens of millions of dollars. In the legal department-investigators, intelligence analysts-we have probably about 80 people as part of our global legal enforcement team. But we [also] actually have hundreds of outside investigators and legal professionals. That's just within the legal department. Enforcement is one piece. We spend tens of millions of dollars again on the engineering side.

I do feel that more and more our partners recognize that we are out there fighting so they can succeed.

Microsoft CEO Steve Ballmer said recently that having Microsoft salespeople in more cities around the world actually helps fight piracy. How?
Fighting piracy requires working with customers, working with resellers, working with law enforcement, working with prosecutors. You're much better placed to do those things when you have a presence than when you don't have a presence.

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.