Denver Software Resellers to Pay $400,000 to Microsoft for Software Piracy

DENVER, March 7, 2001 — Microsoft Corp.’s efforts against the distribution of counterfeit software are being realized today as the company announces software piracy settlements with three Denver area resellers . The settlements, totaling $400,000, were made with 3B Technologies Inc., NetVision Inc. and Gateway USA Inc. (This company is different from, and not affiliated with, the publicly traded company Gateway Inc. NYSE: GTW.) The settlements followed lawsuits filed by Microsoft in 1999 and 2000.

Microsoft’s anti-piracy hotline (1-800 RU-LEGIT) received reports concerning Gateway USA Inc. and 3B Technologies Inc. over a two- to three-year period. After comprehensive investigations, Microsoft filed suit against Gateway USA Inc. in July 1999, alleging the company’s distribution of counterfeit end-user license agreements. Microsoft took legal actions against 3B Technologies Inc. in March 2000, alleging the company’s distribution of counterfeit Microsoft® Windows® 95 operating system, Windows NT® Workstation version 4.0 and Office 97 Professional Edition software. Additional investigations led Microsoft to file litigation against NetVision Inc. in March 2000 for the alleged distribution of counterfeit Microsoft Office 97 Professional Edition software.

All three companies have consented to a permanent injunction prohibiting future infringement of Microsoft’s copyright and trademark rights in addition to the monetary settlement.

Scott Johnson, Microsoft general manager for the Rocky Mountain District, recognized the importance of protecting consumers and resellers from the risk of software piracy.
“Customers have the right to expect that they are receiving genuine Microsoft products,”
he said.
“We encourage consumers and businesses to acquire their software from authorized distributors of Microsoft products to avoid spending their good money on bad software. Resellers and system builders who acquire genuine software through our authorized distribution channel not only assure their customers of high-quality and legal products, but also provide for additional support and services from Microsoft.”

Brien Jacobsen, Microsoft corporate attorney for the Rocky Mountain District, cautioned that trading in counterfeit products is a serious business.
“Not only does it confuse customers by providing them with lower quality products, but it undermines the entire distribution channel and software industry,”
he said.
“It is disturbing to see businesses selling counterfeit software, especially in Colorado, a state that has taken steps to be a leader in the development and implementation of intellectual property rights and services. We believe that unless decisive action is taken against dealers of illegal software, counterfeit product will continue to sell into the retail market, making it difficult for local developers and dealers of genuine software to compete.”

According to a recent study by International Planning & Research Corp., Colorado has a piracy rate of 29.8 percent. This means that more than one in four computers is running illegal software in Colorado. In 1999 alone, the state’s combined tax, wage and salary, and business software revenue losses exceeded $300 million. Additionally, Colorado lost more than 2,500 jobs due to software piracy, impacting Colorado’s work force throughout the distribution chain.

These settlements are announced at a time when the software industry is increasing its level of activity against software piracy. On Feb. 1, the Business Software Alliance (BSA) announced its Software Truce campaign in Denver, a one-month opportunity for local businesses to review their software programs and acquire the licenses they need to get legal without facing penalties for past infringement imposed by the BSA.

Customers or resellers with questions about the legitimacy of Microsoft software should contact the Microsoft anti-piracy hot line, toll free, at (800) RU-LEGIT (785-3448) or send e-mail to piracy@microsoft.com. Additional information on piracy is available at Microsoft’s anti-piracy Web site at http://www.microsoft.com/piracy/ . Consumers can also obtain information by calling the Business Software Alliance anti-piracy hot line at (888) NO-PIRACY (667-4722) or by sending e-mail to software@bsa.org.

About Microsoft

Founded in 1975, Microsoft (Nasdaq
“MSFT”
) is the worldwide leader in software, services and Internet technologies for personal and business computing. The company offers a wide range of products and services designed to empower people through great software — any time, any place and on any device.

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Quote Sheet


Denver-Area Resellers Against Software Piracy



March 2001

“The strength of our relationships with our customers starts with due diligence. We can’t expect our customers to buy into a tier-one strategy if we don’t also advocate proper software licensing. That’s why we support Microsoft and others in fighting piracy.”

— Mark Allen Day
CEO
Winfield Allen

“What many companies that pirate don’t comprehend are the unexpected additional costs and/or penalties associated with making them legal after the infringement. We appreciate Microsoft’s and other software partners’ efforts to curb the piracy that’s a serious problem in our area.”

— Thomas M. Shinners
President
Capital Information Systems Inc.

“From our experience as a system and network integrator, organizations that fail to maintain proper software licensing and support cause their own business to suffer. When they use pirated software to run their business, they can’t receive the support and upgrade benefits critical to its effective use and their future business growth.”

— Tim Krueger
President
Performance Enhancements Inc.

“We strongly support Microsoft’s efforts to ensure that all users of its software are up-to-date and fully licensed. We continue to actively communicate this message and coordinate efforts to level the playing field and establish a more fair competitive environment for resellers like ourselves.”

— Bill Croom
Vice President, Sales and Marketing
3C Technologies Inc.

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