NANJING police have arrested a software designer who allegedly stole software he created for one firm and, after illegally copying it, sold it to another. The China Youth Daily reported that while working in the product development department of Jiangsu System Engineering, Pan Ruhua wrote software to enable payment of taxes through machines that employ 'smart card' technology. Believing his software had great potential, he copied it illegally for future use before he left the job. By last June he had negotiated a contract with another company - Nanjing China One Family on the Road Internet System Engineering. The company paid Pan an advance of 18,000 yuan (HK$16,700), as well as a 50 yuan royalty for each machine sold. Sales started taking off and by last August the Internet company had sold 1,000 machines in Xishan city for a profit of 920,000 yuan. Jiangsu System Engineering's sales started to plummet and, after an investigation by the company's chairman last year, it was discovered that its competitor had also employed Pan. Jiangsu System Engineering's chairman turned to the police, who brought in outside software engineering experts as consultants. Between January and April, the experts compared the original software with that of the Internet company. Once there was proof the software was the same and had been illegally copied, Pan was arrested. The report said that Pan did not think he had committed a crime.