REDMOND, Wash – The Microsoft Corp. has filed lawsuits against eight computer system builders and resellers, including Signature PC in Warwick, alleging they distributed “counterfeit, illicit and unlicensed” Windows and Microsoft Office software and components.
The company, the largest software maker in the world, described the lawsuits as an effort to help legitimate businesses who are being hurt by unscrupulous competitors.
Beyond Cash Donations: How New Forms of Giving Are Transforming Not-for-Profit Accounting
Evolving Funding Landscape for Not-for-Profits Not-for-profit organizations are being asked to do more with less,…
Learn More
“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.”
The company cited a Business Software Alliance finding that 22 percent of the software being used on computers in the U.S. today is unlicensed, including counterfeit and pirated software.
“Resellers who sell counterfeit software and components at a supposed ‘discount’ are certainly undercutting honest businesses and creating a competitive disadvantage in the marketplace,” said Sean Dion, education sales director for TKO EDucation in Westlake Village, Calif., in the same news release.
“The really sad thing is they are putting consumers and businesses at risk because, ultimately, the buyer is buying illegitimate product,” Dion added. “The lure of cheap software is real, but the risk is far too great not to be 100 percent legal. TKO EDucation fully supports Microsoft’s continued action to level the playing field for honest
businesses.”
The company said the suits resulted from its ongoing test purchase program, started in 1997, under which Microsoft buys software, software components or computer systems from dealers and tests them for authenticity. If the items are not legitimate, the dealer is generally sent a cease-and-desist letter and told how it can obtain legal, genuine software, Microsoft said.
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 the new legislation and warning them of the illegality of distributing stand-alone or separated Certificate of Authenticity labels.
The new federal Anti-Counterfeiting Amendments Act of 2003, signed into law by President Bush in December. It provides for criminal and civil penalties for the distribution of genuine standalone 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.”
Microsoft filed its lawsuits in U.S. District Courts in California, Florida, Texas, New Jersey, Alabama, Maryland and Rhode Island. This action follows similar action in November 2004 against eight other dealers.
The suits allege copyright and trademark infringement and, in one case, violation of the new legislation. The defendants are 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.
Microsoft alleges that they all 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 stop.
In addition to the test purchase program, Microsoft said, it 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. 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.
A COA label helps identify genuine Microsoft software. For authorized preinstalled Microsoft Windows(R) operating systems, the COA label should be affixed to the PC chassis and should not be removed from the PC. When the Windows operating system is acquired separately from the computer, the COA label is affixed to the top of the box.
The COA label includes sophisticated anti-counterfeiting features to help verify the software’s authenticity. The COA label also includes a product key code, used in the event that the operating system needs to be reinstalled. More information on COA labels can be found on Microsoft’s How to Tell Web site at http://www.microsoft.com/howtotell.
