Microsoft's XP Copy-protection not Foolproof

A controversial anti-piracy technology built into Microsoft Corp.'s
Windows XP operating system has been cracked, a U.K. security firm has
reported.

Within hours of the operating system's glitzy launch on Oct. 25,
malicious coders in Asia began distributing a software program over the
Internet that allows users to bypass Microsoft's Product Activation
technology, which is designed to prevent users from installing a copy
of Windows XP on multiple computers, according to BitArts Lab, a U.K.
based digital rights management firm.

The Microsoft technology requires all users to "activate" their copy of
Windows XP soon after they purchase it. This process "locks" a product
identification number assigned to each copy of Windows XP to the PC it
is installed on, and then issues an activation code based on that
configuration.

When the activation process is complete, a user registers the
activation code with Microsoft by phone or over the Internet, which
stores it in a database. The company can then scan the database for
conflicting activation codes to identify software that has been
installed on more than one machine.

But some users have managed to get around that process with a program
authored recently by computer hackers which allows them to strip the
activation technology from the software, BitArts said in a statement
issued Friday.

Contacted Tuesday, Microsoft said it was aware of the apparent code
break, adding that it was not surprised that crackers were at work
looking for ways to get around its technology.

"Product Activation isn't a silver-bullet solution, it's just one of
many measures that Microsoft has taken to protect its intellectual
property," a Microsoft spokeswoman said Tuesday. "It was never assumed
that the technology wouldn't be circumvented."

Microsoft has touted Product Activation as one of its key efforts to
protect against "casual copying," which is when a user buys one copy of
Windows and installs it on multiple computers. This type of software
piracy contributed to about half of the estimated US$12 billion lost
last year to the sale of counterfeit software, industry groups have
said.

Microsoft now admits that Product Activation was never likely to root
out more sophisticated software pirates, but rather to cut down on the
casual sharing of its software by individual users, according to the
spokeswoman.

Microsoft Chief Financial Officer John Connors, speaking at a press
conference in San Francisco after the operating system was launched,
said Product Activation was never intended to be unbreakable, but that
it would help protect the company from losing out on a chunk of its
revenue.

"Our intellectual property, similar to the music and motion picture
industries, should be paid for," Connors said at the time. "(Product
Activation) makes people aware of what our licensing plan has always
been."

Windows XP is the first software release from Microsoft to broadly use
Product Activation, though it was successfully tested in earlier
products from the company in Europe and Asia.

During beta testing of the operating system, the anti-piracy technology
came under fire from critics. They charged Microsoft with undermining
the privacy of users by collecting information about their computers,
and said the technology made it difficult for them to exchange
components in their PCs after they had installed the operating system.
Microsoft made changes to the technology in order to assuage those
concerns.