Microsoft Launches National Campaign To Protect Consumers From Server Product Piracy

Lawsuits Filed Against Two Arizona Resellers

REDMOND, Wash. - July 2, 1997 - Microsoft Corp. today announced it has launched a national campaign to protect consumers from piracy of its fast-growing family of network server products, including the Microsoft® Windows NT® Server network operating system and the BackOffice® family. As part of the effort, the company announced it has filed lawsuits against two computer resellers in Arizona.

The campaign focuses on installation of unlicensed server products by resellers who configure computer networks, sometimes without providing customers with license agreements, backup disks or software documentation. The lawsuits, filed in U.S. District Court in Tucson, are against Tucson resellers Computers Under Retail and Future Information Design.

"We are seeing rapid growth in consumer demand for server products, but we are also seeing an increase in server piracy from unscrupulous resellers," said Craig Fiebig, group product manager at Microsoft. "Microsoft is investing heavily in research and development for the BackOffice family of servers. To continue bringing innovative products to market while keeping prices low for our customers, we will take a very hard stance against piracy."

Microsoft's complaint against Future Information Design stems from an undercover investigation in which the reseller allegedly installed unauthorized copies of Microsoft software on the server and workstations making up a network, without providing the necessary licenses or documentation. The investigation started after Microsoft received a piracy report involving Future Information Design through its Anti-Piracy Hotline - (800) RU-LEGIT (785-3448).

The complaint against Future Information Design claims copyright and trademark infringement of the Windows NT Server network operating system. Future Information Design had previously received a cease-and-desist letter from Microsoft for "hard-disk loading," an illegal practice that involves the installation of unlicensed copies of Microsoft software on computer systems being sold to or configured for customers.

According to court documents, Computers Under Retail allegedly sold a counterfeit copy of Windows NT Server retail product to a Microsoft undercover investigator. The complaint against Computers Under Retail alleges copyright infringement and trademark infringement for hard-disk loading of Windows NT Server on the server and workstations of a network.

"In launching this nationwide campaign, our goal is to protect our customers and the vast majority of resellers who play by the rules," said Jim Lowe, Microsoft corporate attorney. Lowe indicated there would be more investigations and more legal actions in the months ahead. "Resellers need to take this issue seriously and ensure that they are distributing genuine Microsoft product."

"Most of the resellers in this area are honest, but there are some who break the rules. It's frustrating to see somebody selling illegal software copies to consumers and undercutting the honest firms in this area," said Peter S. Ireland, president of the 1,000-member Tucson Computer Society, a user group, and owner of Peter S. Ireland & Associates PLC in Tucson, Ariz. "I'm glad Microsoft is stepping up to this problem, and I hope the campaign sends a message to all resellers out there who are breaking the rules."

According to Microsoft, a number of warning signs can help computer buyers 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 hand-written 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 can call the Microsoft Anti-Piracy Hotline or e-mail piracy@microsoft.com. Additional information about software piracy is available from the Business Software Alliance (BSA) Anti-Piracy Hotline at (888) NO PIRACY (667-4722) or via 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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