12 April, 2005 (original story...)
Microsoft Corp. has announced the filing of eight lawsuits against computer system builders and resellers for alleged distribution of counterfeit, illicit and unlicensed software and software components. The lawsuits, all in the U.S., involve businesses in seven states.
"Our partners are coming to us and asking for our help," said Bonnie MacNaughton, senior attorney at Microsoft, in a statement. "They are being undercut and forced out of business by having to compete with dishonest PC manufacturers and resellers who continue to sell illegitimate software. That isn't fair to our partners or to the customers who depend on them." According to the Business Software Alliance, 22 per cent of the software being used on computers in the U.S. today is unlicensed, including counterfeit and pirated software.
Microsoft filed today's eight lawsuits in California, Florida, Texas, New Jersey, Alabama, Maryland and Rhode Island. This action follows similar action in November 2004 against eight other dealers.
The lawsuits are the result of Microsoft's ongoing test purchase program, started in 1997, to ensure that software being distributed is legitimate. Under the program, Microsoft acquires software, software components or computer systems from dealers and tests the software and components for authenticity. If it is not legitimate, the dealer is generally sent a cease-and-desist letter and told how it can obtain legal, genuine software.
In addition to sending cease-and-desist letters to targets of the test purchase program -- thousands of system builders and resellers -- Microsoft sent an additional round of letters in January alerting them to the passage of new federal anti-counterfeiting legislation in the U.S. signed into law on Dec. 23, 2004, and warning them of the illegality of distributing standalone Certificate of Authenticity (COA) labels or authentic COA labels that are separated from the software they were intended to certify.
"There is only one purpose for distributing standalone COA labels: to falsely make infringing software appear legitimate. The federal law makes this deceptive practice now clearly illegal," MacNaughton said. "It closes a perceived legal loophole and allows us to more effectively protect the channel and consumers who deserve to receive the genuine product they believe they are acquiring."
The lawsuits, which allege copyright and trademark infringement and in one of the cases, violation of the new legislation, were filed against Abacus Computer Corp., of Anaheim, Calif.; Avantek Inc., of Orlando, Fla.; First E-Commerce (dba Discount Electronics and/or DiscountElectronics.com), of Austin, Texas; M&S Computer Products Inc., of Boonton, N.J.; Micro Excell Inc., of Gadsden, Ala.; Odyssey Computers, of Pasadena, Md.; Signature PC, aka Signature Computers, of Warwick, R.I.; and Technology One, of Los Angeles.
Defendants in each case are alleged to have continued their distribution of counterfeit software or software components, separated COA labels, or unlicensed software even after they were contacted by Microsoft requesting that they halt their illegal activities.
In addition to the test purchase program, Microsoft has established an aggressive and ongoing education campaign to communicate to its channel partners specifically how it is taking aim at the dishonest system builders and resellers who unfairly undercut them in the marketplace. Through a series of targeted print advertising campaigns and direct mail marketing, the company provides them with information on how to work only with reputable dealers and communicates the results of its ongoing test purchase program, including enforcement actions.
