Software giant Microsoft has filed a complaint against a Beijing-based maker of auto navigation systems, claiming copyright infringement on its Windows CE software and asking for more than 3.67 million yuan ($577,775) in compensation.

The lawsuit against UniStrong has been filed with Beijing No 1 Intermediate People's Court, but no trial date has been set.

Windows CE software developed for tablets enables portable devices to integrate with current Windows desktop technology. Some global navigation satellite systems on the market use the software.

In its court filing, Microsoft alleges that its software is embedded in 17 types of UniStrong navigation products now on sale.

Its employees discovered "unauthorized installation" when checking the navigation system, according to Microsoft. It then hired the China United Intellectual Property Protection Center to investigate and collect evidence.

UniStrong responded in a public statement that it already paid for use of the intellectual property through purchase of navigation hardware from the Taiwan firm Cheng Uei Precision Industry Co Ltd, as proven in purchase order sheets.

The Beijing firm said that its Taiwan partner gave the evidence to the court in early January.

The court has in turn shown the documents to the IP protection center, according to UniStrong.

As the case looms, it is another hurdle facing UniStrong in a market loaded with infringement issues on maps and software.

At least 8 million portable navigation devices - or PND - preinstalled with Windows CE were sold in China last year, but only about 42 percent of them were licensed to have the software, Yan Xiaojia, an analyst at Analysys International, told China Business News.

The Windows CE system dominated the domestic PND market before 2010, but profits have shrunk sharply in recent years due to expansion in the industry, and fierce competition from smart phones and auto navigation systems, industry observers said.

As large companies try to lower unit costs through production scale, per-unit software royalties look increasing expensive, Yan said.

UniStrong has drawn wide public attention due to its brand ambassador, former NBA basketball star Yao Ming.

The company's annual report from last year showed that Yao has 810,000 shares in the company, which is listed on the Shenzhen Stock Exchange, less than half a percent of its publicly traded equity.

UniStrong generated 441 million yuan in revenue in 2011, up 9.62 percent, but its profits dropped by 16.45 percent compared to 2010.

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(China Daily 07/04/2012 page17)