Microsoft Files Eight Antipiracy Lawsuits

Microsoft Corp. Monday filed eight antipiracy lawsuits in five states against companies that allegedly are distributing counterfeit versions of its software or copies that infringe on Microsoft trademarks or copyrights.

The software giant filed suits against BWT Industry Technology Service Inc. dba Computer Max Co. in Arizona; Data Day USA Inc., and Winvtech Solutions Inc. in California; Global Computing Inc. in Illinois; Ion Technologies in Minnesota; and Compustar Co. and Chips & Techs in New York.

Microsoft identified the companies’ alleged illegal activity through several channels, including the new Windows Genuine Advantage program as well as customers reporting suspected pirated Microsoft software, said Mary Jo Schrade, a senior attorney at Microsoft.

Microsoft launched the Windows Genuine Advantage 1.0 program in July requiring customers to validate that they are running legitimate copies of Windows before they can use Microsoft’s various software download services. The program immediately came under fire from customers for bugs that, among other things, enabled users to easily bypass the validation process or identify legitimate copies of software as pirated.

David Lazar, director for Genuine Windows at Microsoft, said Microsoft has addressed initial problems with the program’s validation software and is continuing to address issues as they crop up.

Customers or partners can use Microsoft’s antipiracy hot line, 1-800-RU-LEGIT, to report on companies that could be distributing pirated software, Schrade said. Microsoft also has a "secret shopper" program in which it sends people out to purchase the company’s software from various distributors around the country to ensure they are selling legitimate copies, she said.

All of the companies named in Monday’s suits had been notified previously that they were distributing copies of software that are counterfeit or infringe on copyrights or trademarks Microsoft owns, Schrade said. Microsoft typically sends a "cease and desist" letter to companies first and helps them understand what they are doing wrong and take steps to fix it, she said.

"We take the first approach of education and then enforcement is basically the last resort," she said. "If we can prove that [notifying the companies] hasn’t worked we will sue them."

Microsoft has sued thousands of companies and has a high success rate of eventually making sure the companies stop distributing pirated or copyright-infringing Microsoft products, Schrade said. However, the number of suits has decreased in recent years as Microsoft has stepped up its efforts to identify those responsible for distributing counterfeit copies of its software.

"We have seen that number decrease because our education efforts have proven successful in a number of cases," she said.

One segment of the Microsoft ecosystem that is especially affected by software piracy is system builders that include the Microsoft Windows operating system and other software on custom PCs they offer to customers, said John Ball, general manager for the U.S. system builder business at Microsoft.

System builders have been among the primary catalysts for Microsoft’s increased antipiracy efforts, he said.

"When they go to market and try to sell their computer systems, it’s more expensive then [the systems from] the companies using pirated software, so it makes it harder for them to compete," Ball said. "They came back and said, ’You really have to help us.’"

In addition to the other methods the company uses for identifying pirated software in the marketplace, system builders also send Microsoft leads when they come across competitors selling counterfeit copies, he added.

By Elizabeth Montalbano - IDG News Service (San Francisco Bureau)

Copyright © 2005 IDG Communications, Inc.

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