Microsoft Allows Unilateral Software Licenses to Russian NGOs and Media Organizations

Microsoft announced a new policy for licensing copies of its software to NGOs following a September 2010 article by the New York Times.  The article reported several instances of Russian authorities harassing advocacy groups and journalists, by claiming these groups were using unlicensed copies of Microsoft software.  The article painted a very unflattering picture of the involvement of Microsoft lawyers in Russia helping the authorities suppress opposition voices under the guise of enforcing anti-piracy laws.

Since 2007, the Russian security services have been carrying out raids against opposition groups with the pretext of anti-piracy enforcement.  In fact, they often confiscate computers whether or not they contain illegal software.  The article provided multiple examples of the authorities seizing computers with Microsoft’s help, but focused in particular on the example of the group Baikal Environmental Wave.  This is a group that organized a protest against the decision to reopen a paper factory that had polluted Lake Baikal.  When the raid was conducted at Baikal Wave’s offices, employees quickly offered receipts and original packaging to prove the legitimacy of the software.  Instead, a “supervising officer issued a report on the spot saying that illegal software had been uncovered.”  According to the article, Microsoft declined to confirm the authenticity of Baikal Wave’s documentation, leaving the matter to the court to decide.

Microsoft essentially received a public shaming from the New York Times with regard to its actions in Russia.  In fact, Brad Smith, Microsoft’s General Counsel, stated in his response that “[a]s General Counsel for Microsoft, it was not the type of story that felt good to read.  . . .  It suggested that there had been cases when our own counsel at law firms had failed to help clear things up and had made matters worse instead.”  Smith went on to announce broad changes to Microsoft’s anti-piracy enforcement efforts.  Specifically, Microsoft is creating a new unilateral software license for NGOs that will “ensure they have free, legal copies of [its] products.”  To qualify for the license, “NGOs must operate on a not-for-profit basis and have a mission to benefit the local community.  Eligible organizations may also include small newspapers, independent media, or others that hold a local public communication license, are members of a local media association, or are recognized by an international media organization.”

There are three main advantages to this new license.  First, the license will run automatically from Microsoft to the NGOs, eliminating the problem that NGOs might not be aware of the policy.  Second, Microsoft announced that availability of the license will be expanded beyond Russia to NGOs and media organizations in Armenia, Azerbaijan, Belarus, China, Kazakhstan, Kyrgyzstan, Malaysia, Tajikistan, Turkmenistan, Uzbekistan, and Vietnam.  This is very good news, since the use of anti-piracy enforcement as a ruse to quell political dissent is likely not limited to Russia.  Third, and perhaps most importantly for Microsoft’s public image, this change “effectively changes the factual situation,” according to Smith.  Information provided by Microsoft to the authorities will now exonerate the NGOs, since the information will show the software is validly licensed.

The main problem with this new license is that it only lasts until January 1, 2012.  After that, Microsoft expects NGOs to take advantage of the other software licensing programs it offers to provide low cost or free licensed software.

One commentator from the Committee to Protect Journalists has expressed hope that Microsoft’s new position will “dissuade politically motivated officials from using its name as a pretense for intimidation.”  However, he also had less confidence that it would stop the raids entirely.  Time will tell if the unilateral software licenses make any difference in the security services actions, but at least Microsoft will be able to say they were no longer providing a helping hand.

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* Alayna Ness is a third year law student at Wake Forest University School of Law, graduating in May 2011.  She holds a Bachelor of Science in Business from Indiana University.  In the summer of 2010, she worked at the Securities and Exchange Commission in Los Angeles, California.  Ms. Ness will be taking the bar examination in Virginia and plans to practice corporate and securities law.