A Chinese court has sentenced four people to jail for pirating Microsoft's Windows XP operating system, China's state-owned media reported on Friday.

The four people were convicted of copyright infringement on Thursday for selling a modified version of Windows XP, called Tomato Garden, which was downloaded by 10 million people, the Shanghai Daily newspaper reported on its Web site.

Tomato Garden stripped out anti-piracy protections built into Windows XP, it said.

The heaviest penalties in the case were levied against Hong Lei, the chief developer and distributor of the software, and Sun Xiansheng, who managed the online marketing efforts for Tomato Garden, the report said. Both were given three and a half year sentences and a 1 million ($US146,150) yuan fine.

Two others -- Liang Chaoyong and Zhang Tianping -- were given two-year sentences and fined 100,000 yuan.

Chengdu Share Software Net Science and Technology, the company that operated the Tomato Garden Web site, was also convicted in the case.

The court confiscated earnings of 2.9 million yuan from the company and fined it an additional 8.7 million yuan -- equal to three times the amount it earned from sales of the software, consulting company Marbridge Research said, citing a local media report.

The verdict was a "timely warning to counterfeiters of software products including Windows 7," Microsoft said in a statement.

"Microsoft applauds the efforts of government enforcement agencies and the court," it said. "Microsoft will continue to cooperate closely with the Chinese government and local industry partners to promote respect for intellectual property rights."

Pirated Microsoft software is widely used in homes and offices across China and can be bought at many electronics bazaars.

A pirated version of Windows 7 was already on sale at a Beijing bazaar last month for around $US5, though the operating system is not slated for release until Oct. 22. A cracked version of the OS also appeared online in recent weeks after a Windows system image and a product key were stolen from Lenovo, China's biggest PC maker, and placed on a Chinese hacker forum.

(Owen Fletcher in Beijing contributed to this report.)