A lawyer for Microsoft predicted a "massive" software piracy problem within the next decade unless governments, particularly those in piracy hot spots in Asia, do more to crack down on counterfeiting.

"It involves organized crime," said Katherine Bostick, a senior corporate attorney for Microsoft, at a technology conference Wednesday in Cyeberjaya, Malaysia.

Bostick said industry data shows that 40% of software products were pirated in 2001, an increase of 1%. Piracy costs software companies $11 billion a year in lost sales, she said. Microsoft reported $28.4 billion in revenue for its 2002 fiscal year ended June 30.

Software piracy is rising in China, Taiwan, Hong Kong, Malaysia, and Indonesia, Bostick said. In India, Malaysia, and Singapore, 54% of software is counterfeit. Tougher enforcement could help, she said.

Governments should work more closely with software companies to educate consumers about intellectual-property rights, Bostick said. "In five to 10 years, the problem will be massive," she said. "Everyone loves a bargain."