Microsoft Applauds Washington State’s New Anti-Counterfeiting Law

REDMOND, Wash., May 14, 1999 — Microsoft Corp. officials today applauded the actions of the Washington State Legislature in passing EHB 1007, a bill that provides for felony treatment of counterfeiting in the state. Washington Gov. Gary Locke is signing the bill, which passed the legislature unanimously, into law this evening. Washington becomes the 23rd state to enact a felony counterfeit statute.

“Washington is a leader in the software industry, which means it is also one of the states that is hardest hit by counterfeiting,” Gov. Locke said. “The time has come to combat this crime with more severe legal consequences. The penalties imposed by EHB 1007 should help deter criminals who intend to engage in the manufacture and distribution of counterfeit software in this state.”

EHB 1007 states that selling or distributing counterfeit items is a misdemeanor if it is the offender’s first counterfeiting offense, but is a Class C felony if the offender has been previously convicted of two or more offenses and the violation involves more than 1,000 items or the total retail value of all items is $10,000 or more. Sentences for a Class C felony can include confinement for a term of five years and a fine of up to $10,000.

“Software counterfeiting increasingly has become dominated by sophisticated criminals, making it virtually impossible for copyright owners to combat the problem solely through civil litigation,” said Brad Smith, general counsel international at Microsoft. “The stronger penalties provided in EHB 1007 should help shut down counterfeiting operations and prevent unwitting customers and the honest distribution channel from falling victim to counterfeiters.”

In addition to the increased potential for viruses, consumers who acquire counterfeit products could find they are missing key elements, such as user manuals and product identifications, Certificates of Authenticity, end-user license agreements and even software code. And customers who acquire counterfeit software are not eligible for technical support or upgrades.

Counterfeiting, which is one of the top three most common types of software piracy, also adversely affects the state’s economy and local businesses. According to a 1997 study released by the Business Software Alliance and the Software Publishers Association, more than one in four software programs in the United States is illegal. Data gathered by International Planning and Research Corp. indicates that in Washington, where the piracy rate is 22 percent, at least 3,700 jobs and more than $719 million in combined lost wages, tax revenues and retail sales were lost in 1997 due to piracy.

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. Consumers can obtain more information about software piracy by calling the Business Software Alliance anti-piracy hot line at (888) NO-PIRACY (667-4722) or sending 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.

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