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American ISV Sues China for $2.2 Billion

It’s charging them with misappropriating trade secrets, unfair competition, and copyright infringement

Cybersitter LLC, a little family-owned California ISV also known as Solid Oak Software, filed a $2.2 billion piracy suit Tuesday against the People's Republic of China, seven major computer makers and two Chinese software houses in federal court in Los Angeles.

It's charging them with misappropriating trade secrets, unfair competition, copyright infringement and conspiracy in connection with the Chinese government's mandate last summer that all PCs sold in-country be bundled with a piece of censorware called Green Dam Youth Escort.

The order raised a worldwide stink with human rights activists who claimed that the government's anti-smut campaign was a thinly veiled attempt to block user access to sensitive political and religious sites and researchers at the University of Michigan quickly determined that Green Dam code, supposedly written by the two Chinese ISVs, had been lifted from Cybersitter's eponymous program.

The suit claims Green Dam filched over 3,000 lines of Cybersitter's code and says that Sony, Lenovo, Toshiba, Acer, Asustek, BenQand Haier continued to distribute the software knowing that it was poached, even after the government's mandate was reversed. HP and Dell resisted the order while political pressure was applied.

The suit estimates that 56 million copies of Green Dam were distributed, which is how it calculates the $2.2 billion in damages it's demading. Cybersitter then cost $40 a copy. The program was subsequently rewritten and the price dropped.

The suit also charges Green Dam's Chinese developers, Zhengzhou Jinhui Computer System Engineering and the Beijing Dazheng Human Language Technology Academy, with breaking U.S. economic espionage law and claims Cybersitter's site was repeatedly hacked by the Chinese Ministry of Health.

In October Cybersitter sued CBS Interactive's ZDNet China for distributing the software, a case that settled out-of-court last month.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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