Microsoft Pursues Software Pirates at Computer Swap Meets

Legal Action Taken Against 12 Resellers

REDMOND, Wash. - July 10, 1997 - Microsoft Corp. today announced that a broad investigation of New York and New Jersey computer swap meets has led to the identification of 12 vendors allegedly involved in the illegal distribution of Microsoft® software.

Microsoft's undercover investigators visited nine computer "shows" sponsored by MarketPro and Tri-State New England Inc. after receiving a high volume of calls to Microsoft's Piracy Hotline (800-RU-LEGIT [800-785-3448]) reporting illegal activities at computer swap meets in the two states. During their investigation, they discovered resellers engaged in a practice known as "hard disk loading," or the installation of pirated software on computers that are in turn sold to consumers. Investigators also purchased many units of Windows® 95 operating system software and the Microsoft Mouse, nearly half of which proved to be counterfeit.

"Our goals are to protect consumers and to level the playing field for honest resellers, all of whom are being hurt by this illegal activity," said Geoff Goetz, anti-piracy program manager for OEM sales in North America at Microsoft. "Hard disk loading deprives consumers of the quality, documentation, technical support, upgrade opportunities and warranty they expect with genuine, licensed Microsoft software products."

As a result of the investigation, Microsoft has filed lawsuits in U.S. District Court for the Eastern District of New York against Com Depot Inc. of Brooklyn, N.Y.; MSI Computers & Systems of Brooklyn, N.Y.; General Computer Professional Corp. of New York, N.Y.; C&H Computers of White Plains, N.Y.; and General Computer Co. of Hauppauge, N.Y.

Under federal law, the resellers could be liable for up to $100,000 in statutory damages for each copyright infringed and up to $1 million in statutory damages for trademark counterfeiting.

Two of the firms, C&H Computers and General Computer Co., had previously settled similar claims with Microsoft in 1996, but investigators found they were continuing to engage in alleged software piracy practices. Settlements have been reached with the other seven vendors who were allegedly selling illegal copies of Microsoft products during the swap meet investigation.

This investigation is part of a comprehensive anti-piracy campaign Microsoft has undertaken to protect consumers and address the problem of hard disk loading and counterfeit distribution in the original equipment manufacturer (OEM) channel.

In addition to increasing enforcement efforts, Microsoft is working hard to help consumers understand the warning signs that could indicate they are purchasing illegal or counterfeit software:

• 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

Customers or resellers with questions about the legitimacy of Microsoft products should contact the Microsoft Anti-Piracy Hotline or send e-mail to piracy@microsoft.com. For more information about software piracy, call the Business Software Alliance (BSA) Anti-Piracy Hotline at (888) NO PIRACY (667-4722) or send e-mail to 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.

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