Microsoft: Malaysian Businesses Must be Aware of Risks and Dangers Lurking within High-End Counterfeit Software

Microsoft does its part to support national drive on curbing pirated software with awareness workshop on High-End Counterfeit Software

KUALA LUMPUR, 23 May 2013 – Microsoft Malaysia (“Microsoft”) today highlighted the risks of what it called “high-end counterfeit software” to businesses, following a recent enforcement action against an IT products distributor in Pasir Gudang, Johor. The enforcement action uncovered 200 copies of such “high-end counterfeit software”, amounting to a combined estimated retail value amounting close to RM180,000.

The danger of high-end counterfeit software to businesses was relayed at a workshop on how to differentiate between high-end counterfeit software from genuine versions. According to Jonathan Selvasegaram, Regional Attorney, Intellectual Property Crimes Unit, Microsoft Operations Pte Ltd, there are noticeable ways on which one can tell apart genuine from high-end counterfeit software, including:-

• [Refer to Pic 1] Certificate of Authenticity (COA) - The COA is a sticker or a label that is attached to the retail packaging for products such as Windows, Office, or Windows Server, which cannot be purchased separately. Additionally, the COA features the product name printed on the label and also contains anti-copy security features such as:
 Interwoven security thread – is built into the paper and random paper fibers are visible when the thread appears at the surface
 Colour shifting ink edge - changes from green to magenta when viewed from different angles

• [Refer to Pic 2] CD/DVD Security - Many Microsoft products on CD and DVD include holographic security features to help ensure authenticity of the product and to protect against counterfeiting. These holograms are embedded within the disc; they are not stickers.

• [Refer to Pic 3] Additional Optical Security - These features are embedded within the disc. When the disc is flipped over, any text or numbers will be seen as a mirror image of the reverse side.

 On the thin Outer Mirror Band (OMB), there is an area that shows “Microsoft” changing to the word “Genuine” as you slightly tilt the disc from left to right.
 In the Inner Mirror Band (IMB), there is an indicator arrow which points toward the outer edge of the disc. There is also a small corresponding indicator arrow on the thin OMB band, facing the much larger IMB version. These two elements should be in direct alignment with each other.

According to Jonathan, it was a combination of factors that seem to drive the pervasiveness of counterfeit software among Malaysians (especially Malaysian Small Medium Businesses - SMB): “With many small businesses, financial resources are limited, and more often than not, the business owners must also wear many hats. Not only must they drive and grow their business, they must also take care of payroll, manage IT and more. Because they have so many things to take care of, they have no time to manage details – especially to inspect each and every software for its genuine status. They may assume that all their purchases are genuine – especially when they pay premium prices for it. This leaves them vulnerable to unscrupulous vendors who try to pass off the high-end counterfeit software as genuine ones.”

He continued, “At the same time, because small businesses must be very careful with their limited financial resources, unscrupulous vendors also take advantage of them by providing offers that – upon closer inspection – are just too good to be true.”

High-End Counterfeit Software An International Problem
Jonathan however was quick to add that SMBs were not alone in combating counterfeit software, and that Microsoft is working hard with various government agencies to help curb pirated software and the lurking dangers associated with them.

“In fact, the recent enforcement action by the Ministry of Domestic Trade, Co-Operatives and Consumerism (MDTCC), is a clear example of how counterfeiting and piracy is not a local problem, but an international one. The action was kicked off following a tip-off by Microsoft Corporation after several months of extensive and intensive investigations that followed the trail of the counterfeit products unwittingly purchased by several entities in Bosnia and Herzegovina, which were then traced back to the IT products distributors here in Malaysia,” said Jonathan.

The enforcement action was carried out by the MDTCC’s enforcement division against an IT products distributor in Pasir Gudang, Johor, where more than 200 copies of suspected counterfeit Microsoft software were seized with a combined estimated retail value amounting close to RM180,000. The software titles of the seizure include Windows 7 Professional, Windows 7 Home Premium and Office Professional 2010.  A 26 year-old man was remanded during the raid to assist with the investigation and subsequently released on police bail.

“Microsoft deeply appreciates the work of the MDTCC in taking such strong enforcement action with this raid.  We are particularly concerned about how high-quality counterfeit software are being passed off as genuine software to unsuspecting customers, and take seriously our responsibility to protect customers from the productivity and security risks associated with counterfeit software, which often contain malicious code or malware. Counterfeit software often fails to operate properly, presenting a real risk of security breaches as well as a loss of business data, reputation and cost to recover from them to the unsuspecting business owner.”

Jonathan further elaborated that Microsoft has in place a clear strategy on how it wishes to tackle counterfeiters, and that today’s workshop was part of its 3E-strategy.

“Workshops like these are just a small part of our overall strategy to address the increasing sophistication of software counterfeiters. In addition to the recent collaboration with MDTCC, Microsoft focuses its efforts on three fronts:-
1. Education - Microsoft is raising awareness among customers and resellers about the serious risks of counterfeit software.
2. Engineering - Microsoft is continuing to invest in forensic technologies and anti-counterfeiting product features.
3. Enforcement - Microsoft actively supports government officials and law enforcement agencies in taking action against software counterfeiters.
We hope that with raised awareness on the issue, even the most unscrupulous counterfeiters can be stopped.”

Avoid the hidden cost of software piracy
Microsoft advises consumers to take the following steps to avoid the inadvertent purchase of pirated software:

• When purchasing a new PC, always insist on installing a genuine copy of the operating system.
• Buy from a trusted or authorized reseller and avoid deals that seem “too good to be true.”
• Ensure all software purchases come in their original packaging.
• When buying a PC with Windows, look for the genuine label and Certificate of Authenticity that Microsoft requires be affixed to all PCs on which Windows is pre-installed. As a further check after purchase, log on to www.howtotell.com to confirm the label is authentic.

Customers who suspect they’ve received pirated or counterfeit software are encouraged to report it at www.microsoft.com/piracy. Customers who report suspected violations can provide valuable insights and have a positive impact in the fight against piracy. Microsoft takes every lead seriously in its effort to ensure a safe digital community for all. Since 2007, the company has received more than 10,000 piracy reports from within Southeast Asia—many from people who bought a name-brand PC, paying more money to get “the real thing,” but ending up with far greater risk and liability at the hands of counterfeiters.