Microsoft Lawsuits Help Protect Consumers From Software Piracy

REDMOND, Wash. — July 17, 2006 — The swashbuckling pirates depicted in film and fiction and today’s software pirates have more in common than first meets the eye. The colorful sailors of the high seas sought their fortune by looting a ship’s cargo; one of the most frequent forms of modern-day piracy is the theft of a kind of personal cargo: intellectual property.

Software piracy is an offense that puts honest businesses and consumers at risk and to which Microsoft Corp. responded today with the announcement of an unprecedented move by the company: the filing of 26 lawsuits against alleged dealers of illegal software.

The lawsuits Microsoft is announcing today are against companies that allegedly pirated software or participated in hard-disk loading (installing unlicensed software on computers they sold). One of the lawsuits was filed against a reseller in Georgia who was recently indicted on federal criminal charges. Lawsuits were filed in Colorado, Georgia, Illinois, New Jersey, New York, Ohio and South Carolina.

The filing of these 26 cases demonstrates another step forward in Microsoft’s robust effort to protect consumers, business partners and its own intellectual property from the pandemic of pirated and counterfeit software in the marketplace. Filing lawsuits against companies selling pirated Microsoft® software is an integral part of the company’s Genuine Software Initiative. The initiative focuses the company’s multiple activities and investments directed at fighting software counterfeiting and other forms of software piracy into a single initiative with increased investments across three strategic areas: education, engineering and enforcement. Within each area, Microsoft is investing in activities that educate and help protect consumers and business partners from counterfeit software and other forms of software piracy.

“Our message should be made very clear by today’s lawsuits,” said Mary Jo Schrade, senior attorney at Microsoft. “To our honest partners, and to consumers who expect and should receive genuine Microsoft software wherever they go to buy it, we are listening and we are investing a tremendous amount of resources to help you. We are committed to finding the unscrupulous dealers of pirated software and making piracy a business model that doesn’t work.”

Microsoft sells much of its software through partners — those businesses that develop and market solutions based on Microsoft platforms, provide consulting or technical services on Microsoft systems, or recommend Microsoft technology purchases. The company partners with businesses of all sizes that are vital contributors to the local communities in which they are located. Often these honest companies lose business to companies offering pirated software at cheaper prices. Microsoft’s efforts to combat piracy are aimed at leveling the playing field for these honest partners.

As Tim Klan, president of Expert Computers Inc., a Microsoft Gold Certified Partner and member of the OEM System Builder Partner Advisory Council, describes it, the legal efforts by Microsoft are absolutely critical to the sustainability of legitimate business in the channel. He applauded Microsoft’s legal actions supporting fair competition.

“Honest resellers are losing business because of illegal sales,” Klan said. “Naturally customers are eager to find the best deal, which sometimes happens to be associated with an inferior, illegal product. This is simply unfair, and makes it very difficult for those of us operating within the law to compete. I think I speak for most of us when I say we strongly support Microsoft’s announcement today.”

Microsoft gathered evidence for these cases through the deployment of a program akin to a secret shopper concept. As part of its test purchase program, the company purchases hardware and software from computer dealers across the country and then tests the software and software components to determine their authenticity. In many of the cases, Microsoft notified defendants of the illegal activity and provided information on how the dealer could acquire and distribute legal, genuine software.

Complaints were also received about some of the defendants through the company’s anti-piracy hotline, (800) RU-LEGIT (785-3448).

“Today’s announcement is really about helping protect fair business practices and assuring that consumers — whether they are businesses or individuals — get what they pay for in terms of Microsoft software,” said John Ball, general manager for the U.S. System Builders Partners Group at Microsoft, which works with businesses that manufacture computers. “We remain deeply committed to leveling the playing field for our partners.”

According to the Business Software Alliance (BSA), 21 percent of all software in the United States is pirated. When consumers unintentionally purchase counterfeit or pirated software, they are not entitled to receive the benefits offered to genuine software users. In addition, customers using illegal software may unwittingly introduce viruses, malicious code or spyware into their computers and put their personal and business security and information at risk.

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

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

The names of actual companies and products mentioned herein may be the 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. Web links, telephone numbers and titles were correct at time of publication, but may since have changed. For additional assistance, journalists and analysts may contact Microsoft’s Rapid Response Team or other appropriate contacts listed at http://www.microsoft.com/presspass/contactpr.mspx.

Legal Case Summary-26 Cases

Filed in the U.S. District Court for the Northern District of Georgia, Atlanta Division

Microsoft Corp. v. Affordable Computers (Austell, Ga.), alleging distribution of infringing copies of Windows® XP Professional and Office Professional 2003 software.

Case No. 1:06-CV-1670

Filed in the U.S. District Court for the Northern District of Georgia, Atlanta Division

Microsoft Corp. v. Budget Computers (Stone Mountain, Ga.), alleging distribution of infringing copies of Windows XP Professional and Office Professional 2003 software.

Case No. 1:06-CV-1668

Filed in the U.S. District Court for the Northern District of Georgia, Atlanta Division

Microsoft Corp. v. Tido Computers (Norcross, Ga.), alleging distribution of infringing copies of Windows XP Professional and Office Professional 2003 software.

Case No. 1:06-CV-1669

Filed in the U.S. District Court for the Northern District of Georgia, Atlanta Division

Microsoft Corp. v. Computer Imaging Services Inc. (Marietta, Ga.), alleging distribution of counterfeit Office Professional 2003 software and/or related components.

Case No. 1:06-CV-1666

Filed in the U.S. District Court for the Northern District of Georgia, Atlanta Division

Microsoft Corp. v. Cyber Connect Inc. (Woodstock, Ga.), alleging distribution of an infringing copy of Windows XP Professional software.

Case No. 1:06-CV-1667

Filed in the U.S. District Court for the Northern District of Georgia, Atlanta Division

Microsoft Corp. v. Sales International LLC (Conyers, Ga.), alleging the trafficking of illicit and/or counterfeit Windows 98, Windows 2000 Professional and Windows XP Professional Certificate of Authenticity labels.

Case No. 1:06-CV-1672

Filed in the U.S. District Court for the Central District of Illinois

Microsoft Corp. v. The Computer Shop (Galesburg, Ill.), alleging distribution of counterfeit and/or infringing Office XP Professional software.

Case No. 1:06 CV 01183

Filed in the U.S. District Court for the Northern District of Illinois, Eastern Division

Microsoft Corp. v. Software Plus Inc. (Buffalo Grove, Ill.), alleging distribution of infringing copies of Windows XP Professional and Office XP Professional software.

Case No. 06C 3813

Filed in the U.S. District Court for the Northern District of Illinois, Eastern Division

Microsoft Corp. v. Apollo Computer Corp. (Chicago, Illinois), alleging distribution of infringing copies of Windows XP Professional and Office Professional 2003 software.

Case No. 06C 3811

Filed in the U.S. District Court for the Northern District of Illinois, Eastern Division

Microsoft Corp. v. Chicago Computer Club Corp. (Chicago), alleging distribution of infringing copies of Office Professional 2003.

Case No. 06C 3812

Filed in the U.S. District Court for the District of South Carolina, Charleston Division

Microsoft Corp. v. BWC Products Inc. (North Charleston, S.C.), alleging distribution of an infringing copy of Office Professional 2003 software.

Case No. 2:06-2023-CWH

Filed in the U.S. District Court for the Northern District of Ohio, Eastern Division

Microsoft Corp. v. Digital Systems (Eastlake, Ohio) alleging distribution of infringing Windows XP Professional and counterfeit and infringing Office XP.

Case No. 1:06CV1696

Filed in the U.S. District Court for the Northern District of Ohio, Eastern Division

Microsoft Corp. v. Belka Inc. (Akron, Ohio) alleging distribution of counterfeit and infringing Windows XP Professional.

Case No. 5:06CV1693

Filed in the U.S. District Court for the Northern District of Ohio, Eastern Division

Microsoft Corp. v. J&G Computers (Akron, Ohio) alleging distribution of counterfeit and infringing Windows XP Professional.

Case No. 5:06CV1695

Filed in the U.S. District Court for the Northern District of Ohio, Eastern Division

Microsoft Corp. v. SurplusOutlet19 (North Olmsted, Ohio) alleging distribution of counterfeit Windows XP Professional, Office XP Professional and Office Professional 2003.

Case No. 5:06CV1694

Filed in the U.S. District Court for the Northern District of Ohio, Eastern Division

Microsoft Corp. v. Mainstream Computers (Stow and Streetsboro, Ohio) alleging

distribution of counterfeit and infringing Office XP Professional.

Case No. 5:06CV1692

Filed in the U.S. District Court for the Southern District of Ohio, Eastern Division

Microsoft Corp. v. Custom Computer Warehouse Inc. (Columbus, Ohio) alleging distribution of infringing Windows XP and Office XP Professional.

Case No. 2:06cv590

Filed in the U.S. District Court for the Eastern District of New York

Microsoft Corp. v. The ComputerWiz 777 Corp. (Brooklyn, N.Y.) alleging distribution of infringing Windows 98, Office 2000, Windows XP and counterfeit Office XP Professional.

Case No. 06 cv 3446

Filed in the U.S. District Court for the Eastern District of New York

Microsoft Corp. v. Infoserve Technologies Corp. (Glendale, N.Y.) alleging distribution of infringing Office Professional 2003.

Case No. 06 cv 3445

Filed in the U.S. District Court for the Eastern District of New York

Microsoft Corp. v. J.C. Jay Computer Inc. (Forest Hills, N.Y.) alleging distribution of infringing Office Professional 2003.

Case No. 06 cv 3442

Filed in the U.S. District Court for the Eastern District of New York

Microsoft Corp. v. Pearl River Computers Inc. (Stony Brook, N.Y.) alleging distribution of infringing Office 2003 after a prior settlement with Microsoft.

Case No. 06 cv 3443

Filed in the U.S. District Court for the Eastern District of New York

Microsoft Corp. v. Professionalmax Computer Warehouse Inc. (Staten Island, N.Y.) alleging distribution of infringing Windows 2000 Professional and Office Professional 2003.

Case No. 06 cv 3444

Filed in the U.S. District Court for the District of New Jersey

Microsoft Corp. v. Computer Clinic/NR Computer SVC Inc. (Iselin, N.J.) alleging distribution of infringing Office Professional 2003 and Windows XP Professional.

Case No. 2:06-cv-03205-WJM-RJH.

Filed in the U.S. District Court for the District of New Jersey

Microsoft Corp. v. Investment Technologies Inc. (Edison, N.J.) alleging distribution of counterfeit Windows XP Professional.

Case No. 2:06-cv-03206-HAA-MF

Filed in the U.S. District Court for the District of Colorado

Microsoft Corp. v. Computer Plus USA Inc. (Grand Junction, Colo.) alleging distribution of infringing Windows XP Professional and Office Professional 2003.

Case No. 06-CV-01368-PSF-MJW

Filed in the U.S. District Court for the District of Colorado

Microsoft Corp. v. Microcomp Solution Inc. (Denver) alleging distribution of counterfeit Office Professional 2003 despite a prior settlement with Microsoft.

Case No. 06-CV-01365 WDM-CBS

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