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US Software Group Head Sees China's Anti-Piracy Pledges As Band-Aid

--USTR notes modest pickup in sales to the Chinese government, which completed a software legalization effort last May --USTR notes little improvement in state-owned enterprise sector By Tom Barkley Of DOW JONES NEWSWIRES WASHINGTON -(Dow Jones)- The head of a software industry group said Friday that China's latest pledge to expand its anti-piracy campaign to state-owned enterprises won't work unless steps are made to improve transparency. Robert Holleyman, president and chief executive of the Business Software Alliance, welcomed commitments Beijing made to U.S. officials during last week's high-level talks, but said it will likely end up just putting a "Band-Aid" on the problem of rampant software piracy. "I think what the [Obama] administration is trying to get is absolutely on the right track. But it will yield little to no results in new legal sales unless the state-owned enterprises have adopted worldwide practices around managing their software," said Holleyman, whose trade group includes tech giants like Apple Inc. (AAPL) and Microsoft Corp. (MSFT), in an interview. The Obama administration has made software piracy and other intellectual property issues a top trade concern with Beijing, seeing the fact that nearly four out of five programs installed in China are unlicensed as not just an issue for U.S. software makers, but the overall competitiveness of the U.S. economy. In announcing last month that China once again made its watch list of the most egregious violators of intellectual property rights, the U.S. Trade Representative's office said the high piracy rate among state-owned enterprises in China are particularly troublesome because it provides those firms "an unfair trade advantage." USTR noted a modest pickup in sales to the Chinese government, which completed a software legalization effort last May, but little improvement in the state-owned enterprise sector that accounts for more than a quarter of the country's industrial output. Seeking to build on the modest progress made to promote legal software use at the government level, U.S. officials secured a commitment during the annual Strategic and Economic Dialogue last week for China to expand a pilot project focusing on enterprises more broadly. Holleyman said even if the enterprise initiative proves half successful, it could provide a significant boost in software sales and set an important precedent for companies throughout China. But given that China has so far showed little interest in adopting globally accepted best practices in software asset management--or even provided much transparency in its legalization drive--"it's most likely to be a Band-Aid rather than the type of true correction we need," he said. -By Tom Barkley, Dow Jones Newswires; 202-862-9275; tom.barkley@dowjones.com

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