By Alexander Bolton - 03/10/10 09:19 PM EST
Microsoft chairman and founder Bill Gates on Wednesday criticized China for doing too little to protect intellectual property.
Microsoft has lost hundreds of millions of dollars in China because of lax protections for copyrights and patents, straining its relationship with the emerging economic superpower.
“They themselves are creating copyrights and patents and things like that and they have artists, scientists and writers, so I think over time they will get better on this issue,” said Gates, who visited Washington on Wednesday to testify before a congressional panel on foreign aid.
“Certainly, on some of the software copyright things, the level of enforcement is quite weak,” he said.
Bootleg copies of Microsoft software have flooded the Chinese markets, including copies of Microsoft’s new Windows 7 operating system.
Reuters reported in October that copies of the new operating software were selling for about $3 in local Chinese markets — compared to more than $300 in Western markets.
Adding to Microsoft’s heartburn, a Chinese court ruled last year that Microsoft violated the intellectual property rights of Zhongyi Electric, a Chinese firm that designs computer fonts.
Google, Microsoft’s rival, had threatened to pull out of the Chinese market last year after it was the target of cyberattacks it suspects originated in China.
At a congressional hearing on Wednesday, Google said it is fully prepared to shut down its China operation if that is the only way to end the country’s censorship of its networks.
Google’s threatened departure prompted speculation that Microsoft might follow suit, but Microsoft CEO Steve Ballmer quashed the rumor.
“We’ve been quite clear that we are going to operate in China [and] we’re going to abide by the law,” Ballmer told CNBC in January, in reference to Chinese censorship laws that have received criticism from human-rights advocates.
Groups such as Human Rights Watch have questioned Microsoft for not taking a stronger stand against China’s censorship laws.
“Microsoft is on the wrong side of this issue,” Arvind Ganesan, business and human rights director for Human Rights Watch, said in January. “Just as the U.S. government and a company like Google are starting to push back against censorship, Ballmer and Gates seem to be going the other way.”
Separately, Gates told a small group of reporters that President Barack Obama is in danger of falling short in his pledge to double foreign aid to countries in need.
“We’re hopeful they’ll still make that commitment, but it would require bigger increases further out,” said Gates, one of the world’s wealthiest men.
The Bill and Melinda Gates Foundation has pledged to spend $10 billion over a decade to fight diseases such as AIDS, but Gates wants to spread the message that private philanthropy funds only a small part of what is needed for global health.
Gates said he met with Obama in March of last year to discuss global health programs. He said lawmakers must join together in a bipartisan effort during tough economic times to fund global health or the president’s vision would be nearly impossible to achieve.
“If we don’t get at least the modest increase we’re talking about here, it’s a huge blow,” he said, adding that it would send a strong signal affecting future funding increases for global health. “It makes it almost impossible to get there — not impossible, but almost — if you’re not on a path of increase.”