Microsoft today said it is working closely with the Malaysian government after pirated copies of its next generation computer operating system went on sale years before it is due for release.

The software, codenamed "Longhorn" and designed as the successor to Windows XP, is being sold for less that two US dollars but Microsoft stressed that it is an incomplete version of the product which might be released only in 2006.

"Microsoft is aware of the pirated copies of Longhorn being sold in the country," the Malaysian office of the software giant said in a statement.

"The version of Longhorn which has been released to-date are developer codes, not fit for business or consumer use as it is not a complete product.

"Customers who run the illegal copy of the product are doing so at their own risk since the product is incomplete and customers are exposing themselves to risks and vulnerabilities.

"We are working closely with the Ministry of Domestic Trade and Consumer Affairs to ensure that our customers and businesses are protected."

Internet leak

A spokeswoman told AFP there were two possible routes for the pirates to have gained access to the software - either through the leaking of "some code" on the Internet last year or from CDs distributed during a professional development conference in Los Angeles in October.

Malaysia, like many parts of Asia, is awash with pirated discs and new movies are sometimes sold on the streets even before they hit the big screen, often for as little as RM5 per copy.

After conducting a nationwide blitz on piracy this year, the government announced it would impose price controls on locally-made original discs from January in an attempt to make pirated versions less attractive.

However, the local film and music fraternity said the move could backfire and kill the industry, while the United States warned that the price cutting could prompt producers to shun the country.

Market forces would compel producers based in the US, which owns 70 percent of disc copyrights, to shift to more lucrative markets, a US official said.

Microsoft said the Malaysian government had taken a strong stand against pirates but "fighting piracy is the responsibility of all parties, not only the government and copyright owners." - AFP