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Avoid the hidden costs of pirated software: Microsoft

AvantiKumar | June 3, 2013
Microsoft adds support to national workshops to curb counterfeit software.

Microsoft CD-DVD Security modified 

Photo - CD-DVD security example.


A recent enforcement action that uncovered 200 copies of 'high-end counterfeit software' worth about RM180,000 (US$58,580) in Pasir Gudang, Johor, helps to highlight some of the risks Malaysian businesses face with pirated software, said technology solutions giant Microsoft, which is supporting a national awareness campaign.

Microsoft Operations regional attorney, Intellectual Property Crimes Unit, Jonathan Selvasagaram, who participated in the first of a national workshop series, said counterfeit software was pervasive in the local small and medium business (SMB) sector.

"With many small businesses, financial resources are limited, and more often than not, the business owners must also wear many hats," said Selvasagaram. "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," he said. "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."

"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," he said, adding that SMBs were not alone in combatting counterfeit software. "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," said Selvasagaram. "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."

He said the enforcement action was then performed by MDTCC's enforcement division against an IT products distributor in Pasir Gudang, Johor, where seized software included 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.

 Detecting counterfeit software

Selvasagaram said Microsoft welcomed the work of the MDTCC. "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, presents a real risk of security breaches, loss of business data, reputation as well as the costs to recover from such losse to the unsuspecting business owner," he said.

"There are ways to tell genuine from high-end counterfeit software, said Selvasagaram. These include looking for:

- A 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 an interwoven security thread - is built into the paper and random paper fibres are visible when the thread appears at the surface (Colour shifting ink edge - changes from green to magenta when viewed from different angles).

-  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.

- 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.

"Workshops like these are just a small part of our overall [3E] strategy to address the increasing sophistication of software counterfeiters," he said. "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."


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