Microsoft Takes Action Against Five Resellers in Arizona and New Mexico For Alleged Distribution of Counterfeit Software
Piracy Rates Exceed National Average for Both States
PHOENIX -- March 2, 2000 -- Microsoft Corp. today announced that it has filed software piracy lawsuits against two companies in Arizona and three in New Mexico. The lawsuits, alleging copyright violations and trademark infringements, were filed against businesses in both states for allegedly distributing counterfeit and/or infringing Microsoft® software. The lawsuits aim to protect customers and legitimate distributors from the effects of software piracy.
"Consumers are being duped by companies that sell software at suspiciously low prices. They're throwing good money at software that isn't worth anything," said Ann Ting, owner of Transource Computers. "Consumers who purchase counterfeit software do not own a license and are therefore not eligible for technical support or product upgrades - and may receive software that is missing critical software code. We are dedicated to educating our customers about the impact of software piracy and appreciate all software companies that are working to educate consumers about this as well."
The average piracy rate in the United States is 25 percent, which means that one in four computers are running pirated software. Arizona has a piracy rate above the national average at 31.8 percent; New Mexico has a slightly higher piracy rate of 33.0 percent. In 1998, software piracy cost the states an estimated 3,300 jobs, according to a recent study by International Planning & Research Corp. The study indicates that these unrealized jobs equate to nearly $63 million in lost wages and salaries in Arizona and more than $32 million in New Mexico. Furthermore, the drain on tax revenues from piracy in the two states amounted to nearly $22 million - money that otherwise could have contributed to local and state improvement projects.
"Arizona's economic prosperity is due in large part to the technology industry," said Chris Gordon, executive assistant of information technology for the State of Arizona. "Because software piracy has the ability to damage our state's thriving economy, we must all work together to combat it."
Software piracy has a significant impact on state and local economies across the country, as well as throughout the world. According to a study by Nathan Associates commissioned by the Business Software Alliance (BSA), software piracy cost the national economy 109,000 jobs, $4.5 billion in wages and nearly $1 billion in lost taxes during 1998.
Most of the Arizona and New Mexico businesses named in the complaints were investigated as a result of tips to Microsoft's anti-piracy hot line. These tips are typically phoned in from resellers or consumers who acquire suspicious software. According to allegations, each of the defendants continued to distribute unauthorized Microsoft software even after receiving a written request from Microsoft to stop unlawful activities.
Wade C. Fink is also linked to a seizure of counterfeit software by the Australian Customs Service. In that case, an Australian importer ordered software from Wade C. Fink via the Internet at firstname.lastname@example.org. The counterfeit software was intercepted by Australian Customs before it reached the importer and was identified by Microsoft as counterfeit. Australian Customs seized the software and the importer agreed to forfeit it.
The explosive growth, ease of use and anonymity of the Internet have made it easier for pirates to sell and distribute counterfeit and otherwise illegal software. Consumers in the United States and around the world need to exercise caution when buying software online.
All of Microsoft's lawsuits allege that the defendants distributed counterfeit and/or infringed copies of Microsoft software or software components to investigators and/or customers. The complaints are as follows:
Filed in the United States District Court for the District of Arizona:
Filed in the United States District Court for the District of New Mexico:
"Throughout the distribution channel there are many people who provide legitimate software and great service. They need a fair, competitive playing field in order to survive and prosper," said Anne Murphy, corporate attorney for Microsoft. "Microsoft is working to combat software piracy through education programs and enhanced security features, and by taking legal action against those who distribute counterfeit software."
Through the implementation of new anti-counterfeiting features, Microsoft is taking steps to make counterfeit software easier to spot and to assist honest resellers and OEM system builders in distributing genuine software.
Microsoft has recently announced new anti-counterfeiting features for Windows 2000, including an edge-to-edge CD-ROM hologram and a new Certificate of Authenticity (COA) label. These features will make it more difficult for counterfeiters to pass off counterfeit software as genuine to unsuspecting customers.
Consumers and resellers are encouraged to become familiar with the warning signs that can help them identify counterfeit or illegal software:
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 email@example.com. In addition, a list of authorized distributors and details regarding the OEM System Builder program are available at http://www.microsoft.com/oem/. 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 by sending e-mail to firstname.lastname@example.org.
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