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Microsoft wants to put an end to casual copying of its software. The company has enlisted some technical firepower to combat customers who fail to make good on software license agreements, which limit users from sharing copies of a program.

Intellectual property protection is built in the upcoming Microsoft Office XP and its family of software products, which are set for release on May 31.

Executives representing the software giant's licensing technology and intellectual property divisions detailed a copy protection technology included in its upcoming software that prevents users from installing software on multiple computers. The presentation was made Wednesday at Microsoft's Mountain View campus during one of its Silicon Valley Speakers Series events.

Microsoft has added an activation process, known loosely as the Office Activation Wizard, to its latest consumer products that protects against "casual copying," according to Allen Nieman, technology product manager for licensing at Microsoft. Nieman estimates that as much as 50 percent of the pirated software on the market is obtained through the casual sharing of software.

Microsoft has a long history of combating software piracy around the world, noting in its first-quarter earnings last week that industry efforts are paying off.

Wizard Goes to Work

With the Activation Wizard, users are required to activate all new or preinstalled versions of Microsoft's software. The process is completed by filling out an electronic form with the 25-character product identification number that comes with each software product. The software is then issued an installation identification number using public key infrastructure technology specific to the computer it is installed on.

Once the activation process is completed, a user can register the activation number with Microsoft over the phone or directly on the Internet, where it is stored in a database. The company can then scan the database for conflicting activation numbers to identify software installed with a duplicate license.

While the technology prevents software from being installed on multiple machines, the activation process does allow for secondary use rights, Nieman says. Software owners can install products on a laptop as well as on a desktop PC. The technology also allows users to reinstall the software on a computer, as each license is tied to the hardware configuration of the user's computer.

"There's a lot of trend analysis going on," says Brad Smith, deputy general counsel for anti-piracy at Microsoft, explaining how the system identifies license infringements. "It can tell if you have just replaced your hard drive, or if you installed software on another computer."

Privacy Problems

What Microsoft considers its most advanced attempt yet at protecting its intellectual property apparently has become a small controversy among users who criticized the process when it was first tested two years ago, Microsoft says. Much of the problem at that time revolved around privacy concerns. Because activation can be completed in conjunction with product registration, a voluntary process that requires users to send their personal information to Microsoft, many users complained that they were forced into giving up personal data to the company.

After some tweaking, Nieman says, the latest version of the product activator is more clear in noting that activation only requires users to enter the country they reside in.

"We're really focused on protecting end-user privacy," Nieman says.

The product activation tool was first tested in June 1999 through an international pilot with the release of Windows 2000. Software protected with an activation process was distributed in Australia, Brazil, China, Hong Kong, and New Zealand, and later to select users in Canada and the U.S.

"The countries that tested the activation technology represented areas with varying degrees of software piracy," says Smith, who heads Microsoft's anti-piracy efforts around the world. Once the process was tested, the company was able to study user reaction and make necessary changes.

For instance, in its latest incarnation, users will be able to launch a program 50 times without activating the software. At that point, if a user doesn't complete activation, the software reverts to a view-and-print-only version.

In addition to Office XP, Microsoft has included product activation in every consumer and OEM version of Visio 2002, Project 2002 and FrontPage 2002, which will all debut with XP on May 31. Large-scale licensing programs will not make use of the activation tool.

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