Software piracy to cost firm
Exporter must pay $3.23 million to state, stop shipping its products
A Chinese clothing manufacturer and exporter that cut its costs by illegally accessing computer software without paying licensing fees must pay $3.23 million in penalties to California and stop shipping its products to the state until it changes its practices, a judge has ruled.
Judge Susan Bryant-Deason of the San Francisco Superior Court entered a default judgment Aug. 7 against Ningbo Beyond, holding the company responsible for software piracy and unfair competition, after the company failed to respond to a lawsuit that then-Attorney General Kamala Harris’ office filed in 2013.
In her ruling, Bryant Deason said Ningbo Beyond had copied and used computer software from Adobe Systems of San Jose, Symantec of Mountain View, and Microsoft without paying for it, thus gaining an “unfair competitive advantage over apparel industry competitors in California.” She said such savings are significant in an industry with small profit margins.
The judge also ordered California companies that sell Ningbo Beyond clothing, including Dream USA and Lorenzino Collection, to halt their sales in four months, the average current interval between order and delivery, and resume only after the Chinese firm starts using licensed software. During that period, the attorney general’s
eral’s office will seek to contact other California retailers and notify them of the restrictions.
“All businesses in California must compete on a level playing field,” Attorney General Xavier Becerra, who was appointed in January after Harris’ election to the Senate, said in a statement Tuesday. “Ningbo Beyond tried to cheat the system by using pirated software to undercut its competition and boost its profits.”
Since 2010, Becerra said, Ningbo Products has shipped 713,000 pounds of apparel to California. Dream USA and Lorenzino Collection, both based in Los Angeles, have been among the major purchasers.
Ningbo Beyond has no representatives in the United States. The attorney general’s office sent notices of the suit in 2013 to China’s Ministry of Justice, which did not respond until last year, and then said China’s Supreme People’s Court had ruled that the documents would not be forwarded to the company. But Bryant-Deason said the state had provided adequate notice under international rules designed for such circumstances.
The Chronicle’s attempts to contact Ningbo Beyond by email for comment were unsuccessful.
Microsoft sued several Ningbo Beyond companies in Chinese courts in 2012 for failing to pay licensing fees on programs that included Microsoft Office and Windows XP Professional. Ningbo later agreed, as part of a settlement, to purchase licenses for that software.
But Bryant-Deason said Microsoft cannot inspect the Chinese company’s records and determine whether it is using other software that is unlicensed unless it files another suit.
Bob Egelko is a San Francisco Chronicle staff writer. Email: begelko@sfchronicle.com Twitter: @egelko