Local manufacturers warned against IT theft

Manufacturers and exporters have been warned to ensure legal software use, the US state of California has threatened legal action against overseas users of pirated technology.

California is following the example of Massachusetts, where three months ago the state attorney-general settled with a Thai seafood processor, Narong Seafood, over its use of pirated software to lower |its operating costs and undercut its competition.

According to the corporate-backed Open Computing Alliance (OCA), on January 24, California Attorney-General Kamala Harris invoked her state's Unfair Competition Law to address the harm local businesses claim has been done to them by the import of manufactured products using unlicensed software.

She filed lawsuits against two garment makers - Ningbo Beyond Home Textile Co, based in China, and India-based Pratibha Syntex and their affiliate companies - for allegedly gaining an unfair competitive advantage over US companies by using pirated software in the production of clothing imported and sold in California.

If the companies are found liable or decide to settle, the lawsuits could result in fines, among other things, in California in order to deter similar acts there in the future.

The garment manufacturers did not |pay licensing fees for information technology manufactured by Adobe, Microsoft, Symantec and other powerful |corporations.

"Manufacturers who steal IT are not necessarily beyond the reach of laws in countries halfway around the world," warned Michael Mudd, Asia-Pacific |secretary-general of the OCA.

The alliance was founded in 2009. With giant corporations such as Fujitsu, Cisco, Microsoft, Symantec and Hitachi Data Systems participating, it now is active in identifying issues and solutions related to procurement, competition and interoperability.

"Manufacturers and exporters to the US should be concerned, and to protect their business must take precautionary measures to ensure that their software is compliant," Mudd said. "The message is clear - pennies 'saved' by using pirated software are simply not worth the risk of losing access to the world's largest consumer market."

These growing enforcement actions come on the heels of mounting pressure from US trade officials wanting to curb what the big companies deem unfair competition as a threat to job recovery in that country.

The prominence of California's economy also makes this all the more worrisome to small players using illicit software. As of 2011, the gross domestic product of California, at about US$1.9 trillion (Bt57 trillion), was the largest in the country, representing 13 per cent of the United States' GDP. This makes California the world's ninth-largest economy, and behind only China and Japan in the Asia-Pacific region.

The clothing and textile sector is the second-largest manufacturing industry in Thailand that exports to the United States. California is also the top destination for exports from Asean and Thailand.

Now that two state US attorneys-general have directly enforced laws against suppliers from three overseas countries, this is a powerful warning to US trade partners wishing to compete for business in that country, the OCA claims.

The OCA, along with government and corporate partners, says it will continue to organise education campaigns in Thailand to ensure manufacturers and exporters are aware of the barriers they may face in the US market should their software use not be deemed compliant.

The OCA and partners will also connect them with resources to help them determine their software compliance if they are unsure.