BEIJING (Reuters) - A top Chinese copyright official chided Microsoft for launching an anti-piracy tool that nags users of counterfeit software with a black computer screen and said the company's prices were too high.

The U.S. software giant launched "Windows Genuine Advantage" in China last week, a program that turns the background of the Windows operating system's desktop black if the software fails a validation test.

The move prompted lawsuit threats and howls of indignation in China, where the vast majority of computer users are believed to be using pirated versions, unwittingly or not.

National Copyright Administration (NCA) Vice-Director Yan Xiaohong said his agency supported "the rights-safeguarding move taken by institutions including Microsoft," Xinhua news agency quoted him as saying in a report late on Monday.

But companies should "pay attention to the methods," Yan said. "Whether the 'black-out' method should be adopted is open to question. Measures for safeguarding rights also need to be appropriate," Yan said.

Microsoft has defended the program as a measure to protect its intellectual property and help customers determine that they have legal software.

Methods to subvert the program were circulated on Chinese blogs and Internet chat-rooms within days of its launch.

Dong Zhengwei, a Beijing lawyer, said Microsoft was abusing its market power and had filed a complaint to China's trade watchdog, the State Administration for Industry and Commerce, the China Daily said in separate report.

"Microsoft should be fined $1 billion," the paper quoted the lawyer as saying.

Yan said Microsoft's price policies needed to "fit the Chinese situation."

"The company adopted unified prices in the past without considering the income gap between developed and developing countries, so we need to kindly remind them that Chinese customers' affordability should be considered."

Microsoft's China office denied users were being forced to use the anti-piracy program and pointed to recent sales promotions cutting prices of its software in China.

"We appreciate the NCA's understanding and support on efforts made by right holders including Microsoft to protect IPR," it said in a statement on Tuesday.

"Building a market environment that respects intellectual property rights is critical to the development of the entire software industry and of knowledge economy in China."

(Reporting by Ian Ransom; Editing by Nick Macfie)

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