Microsoft Settles Lawsuit Against Seattle Network Reseller

Illegal Copies of Windows NT Server at Core of Lawsuit

REDMOND, Wash. - May 19, 1997 - Microsoft Corp. today announced it has settled a civil lawsuit against a Seattle-area network reseller, Questar Microsystems Inc., for copyright and trademark infringement. The reseller, which assembles and sells servers preinstalled with its own proprietary software, has settled with Microsoft for an undisclosed amount regarding claims that the company preloaded unauthorized copies of the Microsoft® Windows NT® Server network operating system version 3.5 onto its servers for sale to its customers.

"The increasing popularity of our BackOffice™ family of products has brought an increase in its piracy, and we intend to ensure that consumers receive genuine, licensed BackOffice products with proper documentation," said Jim Lowe, Microsoft corporate attorney. "It's important to confront piracy whenever it occurs, to protect consumers and ensure a level playing field for all the honest resellers who play by the rules."

Microsoft filed the litigation against Questar in March, after its investigation substantiated a report received on its Anti-Piracy Hotline alleging that Questar had preloaded unlicensed copies of Windows NT Server on systems it sold to customers and made unauthorized internal copies of Microsoft software for employees' use. "Once Questar's management was apprised of the issues, they were completely cooperative and attentive to ensuring proper software management in the future," Lowe said. As part of the settlement agreement, Questar will ensure that all customers who purchased hardware with Windows NT Server installed will receive licenses and full documentation.

A local organization, the Washington Software & Digital Media Alliance (WSDMA), purchased a server from Questar, only to find that it was preloaded with an unauthorized copy of Microsoft Windows NT Server software. "This type of piracy hurts everyone, from consumers to software developers," said Kathleen P. Wilcox, president and executive director of the WSDMA. "The value of intellectual property should not be underestimated. Copyrighted software is protected by law just as other intellectual property such as movies and books is."

According to Microsoft, a number of warning signs can help consumers identify potentially illegal software products:

• No Certificate of Authenticity
• Prices that are "too good to be true"
• No end-user license agreement
• No product registration card
• No backup disks, manuals or other materials for software installed on a new computer system
• Backup disks that have handwritten labels, are not shrink-wrapped, or appear to be of inferior quality
• Manuals that are photocopied, are not shrink-wrapped, or appear to be of inferior quality

Consumers or resellers with questions about the legitimacy of Microsoft products should call the Microsoft Anti-Piracy Hotline at (800) RU-LEGIT [785-3448] or e-mail piracy@microsoft.com. To receive more information about software piracy, call the Business Software Alliance (BSA) Anti-Piracy Hotline at (888) NO PIRACY [667-4722] or e-mail 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.

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

Other product and company names herein may be trademarks of their respective owners.

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