Microsoft Corp has been ordered by a Chinese court to stop selling versions of its Windows operating systems that include fonts designed by a local company, citing a violation of licensing agreements.

The ruling, issued by Beijing’s No 1 Intermediate People’s Court, might signal a new challenge for international and domestic software makers struggling with piracy in China - newly assertive local firms ready to take their own IP claims to court.

"(Chinese firms) are going to think of China as a place to have their own litigation strategy. I think that’s a trend that’s coming," said Michael Vella, head of China litigation and intellectual property rights (IPR) at Morrison & Foerster LLP.

Vella predicts more lawsuits by local companies.

"We saw it in Taiwan. At first, Taiwanese companies were always on the defensive, and in recent years we have seen them initiating litigation," he said.

In its ruling, the court said Microsoft violated the scope of licensing agreements between the US software giant and a Chinese technology company, Zhongyi Electronic, which designs Chinese character fonts.

Microsoft will have to stop selling the Chinese versions of its Windows 98, 2000, 2003 and Windows XP, according to the court. It is unclear when the ruling will take effect or how many copies are affected.

Microsoft said it will appeal the ruling. "Microsoft respects intellectual property rights. We use third-party intellectual property only when we have a legitimate right to do so," the company said in a statement.
                                                                                                      Source: China Daily