September 28, 2005 2:00 PM PDT

Software pirate to pay $1.1 million

An admitted counterfeiter has agreed to pay Microsoft and Symantec $1.1 million in restitution, a victory in the software industry's fight against software piracy.

The award is part of a plea agreement in a criminal software piracy case in Houston, Symantec said Tuesday. The case came to court after a yearlong investigation by the Houston police and the FBI into the activities of Li Chen, who was found to have 5,100 copies of counterfeit Symantec software at his Houston business, Symantec said.

Chen pled guilty to one count of trademark infringement and agreed to pay Symantec $1,005,000 in restitution, the Cupertino, Calif., software maker said. Microsoft is to get $95,000, according to a copy of the agreement, which was signed on Aug. 29.

Law enforcement officials searched Chen's business, Microsource International, on Nov. 17, 2004. In addition to the pirated software, they found documents showing that Chen had sold counterfeit Symantec products with a retail value of more than $9.9 million, Symantec said.

"This guy was one of the largest distributors of pirated software. He had direct ties to China, where the counterfeit product was being produced," said Cris Paden, a Symantec spokesman.

Microsoft worked with Symantec to support the Houston police and FBI in this case, said Bonnie MacNaughton, a senior attorney at the Redmond, Wash., software giant. "Microsoft is very pleased with the outcome and law enforcement's support for intellectual property protection," she said in a statement provided by Microsoft's public relations agency.

Symantec and Microsoft both have significant ongoing initiatives to fight software piracy. Since September 2003, Symantec has won judgments in criminal and civil court of more than $19.5 million in damages against various entities for selling counterfeit Symantec software, the company said.

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Hidden Counterfeit Reality
It is critical to understand the invisible alarms hidden within announcements such as this. While the investigators searched Chen's offices, the chances are very good that they located (or Chen simply gave it to them) his customer identities and contact information.

If you or your company purchased counterfeit goods from this supplier, you're wide open to software piracy litigation WHEN the software publishers of enforcement entities follow up on those contacts. Clean it up, now!
Posted by (9 comments )
Reply Link Flag
Bologna!
You are only liable if you KNOWINGLY purchased illegal software and the burden of proof falls on the claimant (this is still America). Further, they only go after the big guys where the cost can be justified by the return. The exception to this is a high profile user that can serve to intimidate other into complying. So unless you have some sort of smoking gun in your email most people are safe.

The real question is how much did Mr. Chen make on the sale of the software. If this is the usual slap on the wrist, then he probably made substantially more then the fine. That is the way it works for most white collar crime. To get real punishment you need to be a black kid selling a few grams of "Rock", then you get 10 years in the slammer to "teach you a lesson".

Lastly, is it M$ or Symantic that you work for?
Posted by Mister C (423 comments )
Link Flag
Hidden Counterfeit Reality
It is critical to understand the invisible alarms hidden within announcements such as this. While the investigators searched Chen's offices, the chances are very good that they located (or Chen simply gave it to them) his customer identities and contact information.

If you or your company purchased counterfeit goods from this supplier, you're wide open to software piracy litigation WHEN the software publishers of enforcement entities follow up on those contacts. Clean it up, now!
Posted by (9 comments )
Reply Link Flag
Bologna!
You are only liable if you KNOWINGLY purchased illegal software and the burden of proof falls on the claimant (this is still America). Further, they only go after the big guys where the cost can be justified by the return. The exception to this is a high profile user that can serve to intimidate other into complying. So unless you have some sort of smoking gun in your email most people are safe.

The real question is how much did Mr. Chen make on the sale of the software. If this is the usual slap on the wrist, then he probably made substantially more then the fine. That is the way it works for most white collar crime. To get real punishment you need to be a black kid selling a few grams of "Rock", then you get 10 years in the slammer to "teach you a lesson".

Lastly, is it M$ or Symantic that you work for?
Posted by Mister C (423 comments )
Link Flag
 

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