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Wednesday, December 03, 2003

The Limits of Intellectual Property

Actually Thucydides claims that the Greeks started off as pirates, and Henry Morgan did play a fairly auspicious role in the rise of British capitalism, still it is hard to see how today the extensive piracy which is rampant across much of the Asian continent is going to be especially productive in stimulating innovation and stable business organisation. This point about Longhorn in Malaysia has been around for a few days, but I didn't have time to pick it up before. I am not a MS fan, but obviously something hitting the streets two years before the scheduled release has to be something of a first. It also raises the question as to how viable our current OECD lifestyle-intellectual property model is going to be when faced with the reality of the hurricane. As Marcelo pointed out in a previous post, the current US retreat into limited protectionism, and the absence of any reforming dynamic will have the natural corrolary that progress in this area is likely to come to a dead stop. Seldom in recent history have the foundations of globalisation seemed so shaky.

Microsoft was trying to plug a security hole on Tuesday after discovering that an early version of its next-generation operating system, codenamed Longhorn, was on sale in Malaysia two years before its scheduled release. The incident underscored the software giant's problems with audacious pirates, who were selling the Longhorn copy for as little as $2 in shopping malls near Singapore. Operating systems for personal computers normally cost $200-$300. Microsoft's CEO, Steve Balmer, has identified emerging markets - especially Asia - as Windows' biggest growth opportunity. But piracy is rampant, with an estimated 95 per cent of PC users in China employing illicit copies of the software. Microsoft warned that the Longhorn version being sold illegally in Malaysia was still in the development stage and could prove risky if on home computers. "The product is incomplete and customers are exposing themselves to vulnerabilities," said Jonathan Selvasegaram, corporate lawyer for Microsoft Malaysia. Microsoft believes an "intricate network" of software pirates may have obtained an early version of Longhorn recently distributed to programmers in Los Angeles for testing or else earlier leaked codes that have been circulating on the internet since last year.
Source: Financial Times

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