Microsoft Files Lawsuits Against Five San Francisco-Area Computer Resellers

Microsoft Files Lawsuits Against Five San Francisco-Area Computer Resellers

REDMOND, Wash., March 5, 1998 — Microsoft Corp. today announced it is suing five Bay Area companies for copyright and trademark infringement and distribution of alleged counterfeit products.

The five lawsuits, filed Feb. 27 in San Francisco U.S. District Court for the Northern District of California, represent the second round of a continuing anti-counterfeiting campaign in Northern and Southern California. The campaign’s goal is to stop the reselling and distribution of counterfeit Microsoft® software and bring litigation against perpetrators. Based on a federal law passed in 1996, Microsoft is seeking up to $1 million in damages for each trademark counterfeited.

The following four Northern California companies allegedly sold counterfeit original equipment manufacturer (OEM) versions of the Windows® 95 operating system to Microsoft investigators: Advanced Digital Solutions International Inc. of Milpitas, CHL Microsystems Inc. of Milpitas, Gogate International Inc. of Fremont and Silicon Computers of San Francisco. Lawsuits against these four companies resulted from test purchases by Microsoft investigators, who revisited 22 companies that had previously received cease-and-desist letters for counterfeit distribution.

CHL Microsystems, Gogate International and Silicon Computers also allegedly distributed counterfeit components of Microsoft Easy Fulfillment (MEF) versions of Office 97 Professional Edition. In addition, Gogate allegedly distributed counterfeit retail versions of the Windows NT® Server operating system version 4.0 and counterfeit retail versions of Windows NT Workstation 4.0. Gogate is also currently a defendant in a Southern California lawsuit for allegedly distributing counterfeit Microsoft products.

The fifth company Microsoft filed suit against, Meladi Electronics Inc. of Fremont, allegedly distributed counterfeit retail versions of Windows NT Server 4.0 and the academic edition of Office 97 Professional Edition.

“How many lawsuits does it take for these companies to realize that we’re serious about catching counterfeit distributors?” said Geoff Goetz, Microsoft OEM anti-piracy program manager for North America. “This is a wake-up call for those in the software distribution community that think that they can get away with this type of blatant illegal activity.”

The software industry is a significant driver of the current economic prosperity in the United States, accounting for a $102.8 billion market for software and software-related services, payment of $7.2 billion in taxes and 619,400 jobs. However, software piracy threatens the ability of the industry to continue to contribute to the American economy. According to a 1997 study by Nathan & Associates commissioned by the Business Software Alliance, software piracy in 1996 resulted in the loss of 130,000 jobs, nearly $1 billion in tax revenues and $5.3 billion in wages.

“It’s important that Microsoft is targeting these companies that are unjustly tipping the scales in their favor by distributing suspect product,” said Nazakat Ali, director of materials for Dolch Computer Systems in Fremont. “Counterfeit software is the form of piracy that hurts me the most, and its distribution in the channel is a threat I take very seriously.”

Companies that build PCs and want to obtain genuine Microsoft OEM products for inclusion with their systems should obtain the products only from Microsoft’s 13 authorized Delivery Service Partners (DSPs). A list of DSPs is available at .

According to Microsoft, a number of warning signs can help computer buyers identify potentially illegal software:

  • Microsoft’s agreements with computer manufacturers prohibit them from distributing Microsoft software without accompanying PC hardware. Microsoft products on the retail shelf should never include a line on the front cover of the user’s guide that states, “For distribution with a new PC only.” OEM versions of Microsoft product do not include end-user support.

  • No Certificate of Authenticity

  • Prices that are “too good to be true”

  • 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 Hotline toll free at (800) RU-LEGIT (785-3448) or send
e-mail to [email protected]. More information about software piracy can be obtained by calling the Business Software Alliance (BSA) Anti-Piracy Hotline at (888) NO PIRACY
(667-4722) or sending e-mail to [email protected].

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 Windows NT 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 on Microsoft’s corporate information pages.

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