China, FBI make $500M piracy bust

SHENZHEN, China (Reuters) -- Pirated software worth $500 million, including counterfeit Microsoft and Symantec products, has been seized in a long-running joint probe by Chinese police and the U.S. Federal Bureau of Investigation, officials from both countries said on Tuesday.

The operation began in 2005 and has led to 25 arrests and the smashing of pirating syndicates in at least two Chinese cities that were making and distributing counterfeit software around the world, with most going to the United States.

"The co-operation between the U.S. and China is an important development in the fight against transnational criminal groups violating intellectual property rights," said Steven Hendershot, the FBI's legal attache in Beijing. "But we still have a long way to go."

Widespread intellectual-property rights violations across a range of industries, including software, music, movies and fashion, have been a major source of friction between China and major trade partners the United States and Europe.

Details of what officials called the "unprecedented co-operative effort" between China's policing ministry and the FBI were unveiled to the media at an intellectual-property rights conference in the southern Chinese city of Shenzhen.

More than 290,000 counterfeit software CDs and certificates of authenticity have been seized in the operation, the FBI said.

Six manufacturing and retail facilities were dismantled in Shenzhen and 47,000 counterfeit Microsoft CDs seized, as well as equipment to manufacture Symantec computer-software products.

The FBI said 70 percent of the software had been bound for the U.S., with agents in Los Angeles also involved in tracking illegal software distributors on American soil. The FBI estimated the retail value of the software seized at $500 million.

The figure represents 10 percent of software piracy losses in China in 2006, according to the Business Software Alliance.

Gao Feng, Deputy Director General of China's Ministry of Public Security said the fight against piracy was "a long and arduous task," with profit margins for Chinese software piracy "exceeding that of drug trafficking."

But Gao said recent initiatives had yielded some results with 3,775 piracy cases cracked last year by police across the country, a 31 percent increase from 2005. E-mail to a friend

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