May 27, 2010

Microsoft Licensing And Rental Rights Agreement For I-Cafés

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Microsoft (MS) operating systems are installed and being used in the big majority of i-cafés in the Philippines. It should be of help for i-café owners to know the different kinds of software that he can use on his business and be on the right side of the law. PC software piracy in the country has remained at sixty-nine (69%) percent despite the effort  to bring it down. Microsoft itself made a promo that offers Windows 7 and MS Office 2007 at unprecedented low prices. An information campaign for i-café owners to know his options in licensing his MS software is on-going with the hope of reducing piracy.

The issue of using MS proprietary software always crop out in i-café owners’ forums because Windows desktop operating system and Microsoft Office system licenses do not permit renting, leasing, or outsourcing the software to a third party. As a result, many organizations that rent, lease, or outsource desktop PCs to third parties (such as Internet cafés, hotel and airport kiosks, business service centers, and office equipment leasing companies) are not compliant with Microsoft license requirements. In the past, this prohibition are lifted by way of Rental Rights agreement which is a simple way for organizations to get a waiver of these licensing restrictions through an annual license transaction valid for the legal and genuine MS software purchased from legitimate sources and installed in the computers in i-cafes and similar establishments.
In 2008 when our government agencies tasked to implement the Intellectual Property Code of the Philippines raided (the agencies prefer “inspected”) i-cafés our area due to alleged violation of the law. Using a letter signed by the then OMB Chair Edu Manzano, the raiding team entered the i-cafés and looked for COA (Certificate of Authenticity) stickers, CD installers and sales invoices or official receipts covering the purchase of the MS software.

What the supposedly authorized implementors of the law did not know is that they should have asked for the Rental Rights agreement of the i-café owner with Microsoft to really probe that the rental of the Windows operating system and Microsoft Office are legal. Buying and installing genuine MS software are not enough to legally use them in an establishment like an i-café. Securing a Rental Rights agreement is a requirement before an i-café can legally rent MS software installed in a workstation.

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