... by arresting (!) a programmer charged with helping users block ads
from a commercial IM service.

Debate Over IM Add-Ons in China

Market Leader Says Software Developer Infringed Copyright

By Juliet Ye
Wall Street Journal, November 29, 2007
Page B2

Hong Kong -- A computer-science instructor's arrest on charges of
intellectual-property infringement has sparked a debate about whether a
popular application that blocks Web advertisements is fair or foul.

The instructor, Chen Shoufu, 28 years old, created an "add-on" program
called Coral QQ that modifies QQ, China's dominant instant-messaging
service.

Chinese Internet company Tencent Holdings Ltd. owns QQ, and Mr. Chen's
program changes how it's used -- in ways that many users like. Among
them, it blocks advertisements, although it also includes some ads and
spam from other Web companies as a way to get revenue for itself. It
also resolves Internet addresses, pinpointing the computer from which a
person is messaging, a feature Tencent offers, but for a fee of 10 yuan
($1.35) a month.

Both QQ and Coral QQ are available as free downloads on the Web. Mr.
Chen offers software for download on his Web site, and he includes
Tencent QQ, his own Coral QQ add-on and several commercial ads or
spamware from other companies.

Mr. Chen created Coral QQ in 2001 when he was a student at the Beijing
Institute of Technology, where he now works in the computer center as an
instructor.

China has the world's second-biggest Internet market after the U.S.,
with more than 160 million users, and it is a thriving market for such
add-ons. Coral QQ has about 40.6 million users, according to Chinese
computer-science publication Pchome.

Tencent first complained to Mr. Chen in late 2002, saying Coral QQ
violated its copyright and warning him to stop distributing it. He did.
Mr. Chen then devised a noninvasive "patch" on the program -- a separate
piece of software -- that would run concurrently with QQ on a user's
computer and modify it as the two went humming along. In 2003, he
resumed offering Coral QQ.

In 2006, as it became increasingly apparent that Coral QQ was only
growing in popularity, Tencent filed a 500,000 yuan ($68,000) lawsuit
alleging copyright infringement against Mr. Chen and won a judgment for
100,000 yuan, which Mr. Chen paid. In early August, Tencent complained
to the police in Shenzhen, where it has its headquarters, and on Aug. 16
Mr. Chen was detained. Tencent said Mr. Chen was "making illegal profits
and infringing on Tencent's copyright."

The confrontation has conferred a minor hero's status on Mr. Chen among
China's Web users. Thousands have posted messages on blogs and forums in
support of him.

Hong Bo, a widely known Beijing tech blogger who goes by the handle
Keso, said in an interview that Tencent's QQ "is bullying Chinese users
by monopolizing the market. Coral QQ helped those people, who wanted to
use QQ but hated the software, become Tencent users."

Tencent introduced instant messaging in China when the country had just
over two million Internet users. Today, QQ users send as many as three
billion instant messages a day. But Tencent's dominance of the Chinese
messaging market has at times vexed some of the 270 million users the
company estimates the service has, including multiple subscriptions,
often because of the pop-up ads and service fees.

"We believe that add-ons are not only an infringement on property rights
but also a main cause of online safety problems for users," Tencent
says. "Our aim is to better protect the users' rights while protecting
the company's legal rights."

In a recent episode of a fast-paced legal-cases program called "Case
Tracking," broadcast on a Shenzhen satellite-TV station, Liu Haihua of
the Shenzhen public-security bureau in Nanshan district, said, "Coral QQ
is making illegal profits from copyright infringement and binding in
commercial ads. When users install Coral QQ in their computers, these
commercials are automatically installed."

The police say the case is under investigation and wouldn't make Mr.
Chen, detained in Shenzhen, available for comment.

You Yunting, a noted intellectual-property lawyer in Shanghai, says he
is considering defending Mr. Chen and Coral QQ in court. He agrees with
the court judgment against Mr. Chen but not with the criminal proceedings.

"He's wrong, but not so bad as to be jailed," Mr. You says.

China's Computer Software Copyright Regulations hold that providing
revised software without the express agreement of the copyright owner
may cause the provider to be civilly -- or criminally -- liable. There
are few Chinese laws or regulations specifically governing add-ons,
although add-ons to online games have been prohibited since 2003. As for
whether an add-on application constitutes software piracy, Mr. You says
it defies definition.

"Intellectual-property protection in China is still complex at this
stage," he says.

Write to Juliet Ye at [EMAIL PROTECTED]

http://online.wsj.com/article/SB119629787148507282.html

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