Chinese software pirate jailed for 12 years


A Chinese national who distributed hundreds of pirated software products online was jailed in the US for 12 years on Tuesday.

Xiang Li was sentenced by the US District Court for the District of Delaware for one count each of conspiracy to commit criminal copyright infringement and wire fraud.

Li, who pleaded guilty to the crimes in January, could have faced a maximum of 25 years in prison. He will be deported to China once he is released.

He used to sell pirated and cracked (when digital licence files have been disabled) software titles at a fraction of their original cost. Government officials say he distributed around 550 pirated titles to about 300 buyers in 28 US states and 60 foreign countries. They say the titles were worth around $100 million.

Corporate victims included Microsoft, Oracle, Siemens and SAP, the government said.

More than one-third of the unlawful purchases were made by individuals within the US, including small businesses, government contractors, inventors and engineers.

Government officials from Homeland Security Investigations (HSI) tracked Li from April 2008 to June 2011 – when they arrested him Saipan, a US territory in the Pacific Ocean.

HSI said this is one of the most significant instances of copyright infringement it has uncovered, and that Li is the first Chinese citizen to be apprehended and prosecuted in the US for cybercrimes committed solely from China.

By arresting him in a US territory and showing that he sold goods to US consumers and had infringed US IP rights, HSI was able to indict Li in the US.

The 12-year jail sentence is a fair reflection of Li’s widespread infringement, said Bruce Ewing, partner at Dorsey & Whitney LLP, who added that it will have a strong deterrent effect on would-be pirates, particularly in China.

“Part of the aim [of the authorities] is to send a message to the Chinese government that the US will take action if their government doesn’t.”

Targeting Chinese pirates is a “weapon that IP owners need”, said Brett Heavner, partner at Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, whose clients have Internet-based copyright problems in China and find it hard to enforce their rights there.

“It’s hard to uncover infringement,” he said. “Domain names are hidden. They pay for hosting services using pre-paid debit cards. And there is no discovery procedure.”

While China’s IP enforcement has come a long way and is continually improving, Heavner said, the US authorities’ ability to arrest pirates “even though they are hidden in China, is great”.

The sentence comes a week after a US man, Naveed Sheikh, was jailed for seven years for infringing copyrights on more than 1,000 commercial software programs. The software was estimated to be worth about $4 million.

This article was first published on 12 June 2013 in World IP Review

xiang li, US District Court for the District of Delaware, chinese software pirate, HSI, ICE

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