This is one of those unusual occasions on which I feel genuine sympathy for Microsoft, which has a hard time catching a break in China. It's true there was, during the Tim Chen era, a brief flowering during which Microsoft's government relations improved and the company appeared to make real progress licensing Windows to Chinese OEMs. Remember when Hu Jintao visited Bill Gates? But Tim is in NBA land now (much more glamorous, and with cheerleaders!) and another Moto veteran, Simon Leung, is new in the Microsoft China job. He took over from China R&D head and caretaker chief Zhang Ya-Qin as of last Thursday.

Which was just in time to inherit the latest bit of PR trouble, in the form of an ongoing outcry over Microsoft's anti-piracy measures in China. Welcome to Microsoft, Simon. Kathrin Hille and Mure Dickie report in the Financial Times (subscription): 

When Microsoft rolled out its latest anti-piracy initiative this year, it was not aimed at any particular country. Windows Genuine Advantage, a tool that identifies users of counterfeit software and pushes them to buy the real thing, was launched worldwide in several geographical blocs.

But Microsoft ran into trouble when the roll-out hit China last month. While users in other markets kept silent when hit by one of WGA's more extreme features, a mechanism that blackens the desktop background on computers found to be using counterfeit Windows, their Chinese peers broke into a storm of anger, forcing Microsoft officials in the country into damage control mode.

***

Last month, Dong Zhengwei, a Beijing-based lawyer, called on the police to pursue Microsoft for what he called a "hacker-style attack" on consumers.

Local bloggers have also taken up the issue in fervent postings. "If we ignore them for six months, they will come back begging us to take it for free," one blogger called 'liangyouliang' wrote at the weekend. "If they don't seek good relations with us and not give us a little something for our [exported] clothes, then the people of their country will go naked."

So let me get this straight. People steal Microsoft's software and then threaten the company for inflicting what can only be described as a cosmetic inconvenience on the thieves? That, my friends, takes balls of burnished brass. Only in China.

Unfortunately for Microsoft, they do skate on some dangerously thin ice here, given that no less a figure than Bill Gates himself has explained how, in a certain light, piracy can be viewed as a competitive tool for Microsoft in China. And as zillions of disappointed Internet entrepreneurs know, once you set the expectation that something can be had for free, it's damned hard to persuade people to pay for it again. Unless you're willing to start breaking fingers, which might be an effective collection technique, but is widely frowned upon in traditional brand marketing circles.

In fact, Imagethief thinks that Microsoft is right to enforce its intellectual property rights more vigorously in China. Imagethief also thinks that Chinese computer users really need to get over the idea that they can knock off Windows (and just about every other bit of software) for free forever. Forget the relatively modest implications for Microsoft. The practice is lethal to Chinese software companies, some of which deserve a better shake, and undermines the premise of domestic innovation, which is one of the pillars of the current 11th Five Year Plan. If Chinese computer users want free software they should check out Ubuntu. Although that seems unlikely as long as the games are all running on Windows.

But Microsoft eats some blame for their current difficulties as well. First, they should have consulted the government before throwing the switch and either got support for their plan or worked with the government to come up with an acceptable plan. One wonders if this plan was imposed from Seattle without enough consideration of the ramifications in China.

Yes, all things being equal, having to seek government support to enforce perfectly clear intellectual property rights seems goofy. But this is China, where business and politics are inseparable and all things are definitely not equal. Also, while Microsoft is perfectly justified in asserting its IPR, doing so through a technique that amounts to a public shaming in China, where public shame is a big deal, seems like an invitation to public outrage (especially, it must be admitted, with the benefit of hindsight). Rather than changing the desktop, perhaps Microsoft should have made a few behind-the-scenes adjustments to infringing PCs, such as dialing down the CPU performance or switching off network connectivity.

On the other hand, can you imagine an Internet cafe full of caffeinated young men suddenly losing net access? I got yer social unrest right here, buddy...

Perhaps Microsoft should construct an entirely new business model for licensing in China. They could take a page from the suffering music business with compulsory licensing on devices. But I imagine the OEMs might have a thing or two to say about that...

See also:

Silicon Hutong's David Wolf on constructive approaches to IPR issues in China.

Note:

Imagethief recently heard that Mure Dickie will be relocating to Japan, and that Ms. Hille is assuming his portfolio here in China. I've spoken to Mure on many occasions and he has always been courteous and engaging, something no flack takes for granted. Imagethief wishes Mure all the best in Tokyo.