Microsoft Files Lawsuits Against Six Northern California Computer Resellers

Microsoft Files Lawsuits Against Six Northern California Computer Resellers

REDMOND, Wash., Jan. 28, 1998 — Officials at Microsoft Corp. today announced that the company has filed lawsuits against six Northern California computer resellers for copyright and trademark infringement.

The lawsuits allege the companies installed unlicensed software and distributed counterfeit products. They represent the second round of a “continuous sweeps” program that Microsoft launched in several key North American regions. The campaign is aimed at stopping the practice known as “hard disk loading,” or the installation of pirated software on computers that are then sold to customers. The lawsuits were filed in the U.S. District Court, Northern District of California, San Francisco Division.

In this sweep, Microsoft investigated 23 companies for alleged illegal activities. Sixteen had previously settled with Microsoft for past illegal activity. During the investigation, PC systems from six companies were purchased and allegedly contained illegal software. All but Umiracle Microsystems Inc. of Fremont, Calif., had previously settled with Microsoft for similar illegal activities.

The others named in the lawsuits are Hitron Systems of Santa Clara, Calif; Multi-Function Concept Computer Systems Inc. dba MCC Systems of San Jose, Calif; Distar Inc. of San Jose, Calif; Songtech International Inc. of Fremont, Calif.; and M.I.T. Inc. dba Laitron Computers of San Jose, Calif. The companies allegedly distributed counterfeit or hard disk-loaded Microsoft products, including the Microsoft® Windows® 95 and Microsoft Windows 3.1 operating systems, MS-DOS® 6.0 and MS-DOS 6.22 operating systems or Office Professional 97.

“This is the first time in a sweep that we’ve caught so many companies a second time,” said Jim Lowe, Microsoft corporate attorney. “They certainly can’t claim they didn’t know what they were doing was wrong.”

The maximum statutory damages allowed is up to $100,000 per work for copyright infringement and $1 million per mark for trademark infringement.

“It’s important that Microsoft is protecting the distribution channel, especially from companies that have been caught distributing illegal products in the past,” said Echo Tsai, vice president of sales and marketing for Hi-Q Systems of Sunnyvale, Calif. “In the end, it’s the consumer that benefits from strong legal action being taken against those companies. The channel must have this protection to have a level playing field.”

Companies that build PCs and want to obtain Microsoft OEM products for inclusion with their systems should obtain products only from one of Microsoft’s 13 authorized Delivery Service Partners (DSPs). A list of DSPs is available at http://www.microsoft.com/oem/ .

Microsoft receives more than 2,000 calls and e-mails each month that are reviewed by investigators to identify computer resellers and end users that are using or distributing Microsoft software illegally. In addition to increasing enforcement efforts, Microsoft is working to help consumers recognize warning signs that could indicate they are acquiring illegal or counterfeit software, such as the following:

  • Prices that are “too good to be true”

  • No certificate of authenticity

  • Microsoft products on the retail shelf that include a line on the front cover of the user’s guide that states, “For distribution with a new PC only.” Microsoft’s

agreements with computer manufacturers prohibit them from distributing Microsoft software without accompanying PC hardware. Microsoft does not provide consumer support for this type of product.

  • No end-user license agreement

  • No product registration card

  • No backup disks, manuals or other materials for software installed on a new computer system

  • Backup disks that have handwritten labels, are not shrink-wrapped, or appear to be of inferior quality

  • Manuals that are photocopied, are not shrink-wrapped, or appear to be of inferior quality

Customers or resellers with questions about the legitimacy of Microsoft products should contact the Microsoft anti-piracy hot line toll free at (800) RU-LEGIT (785-3448) or send e-mail to piracy@microsoft.com. To receive more information about software piracy, call the Business Software Alliance (BSA) anti-piracy hot line at (888) NO PIRACY (667-4722) or send e-mail to software@bsa.org.

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software for personal computers. The company offers a wide range of products and services for business and personal use, each designed with the mission of making it easier and more enjoyable for people to take advantage of the full power of personal computing every day.

Microsoft, Windows, and MS-DOS are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.

Other product and company names herein may be trademarks of their respective owners.

Note to editors: If you are interested in viewing additional information on Microsoft, please visit the Microsoft Web page at http://www.microsoft.com/presspass/ on Microsoft’s corporate information pages.

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