Microsoft Files Lawsuit Against Former Solution Provider

Illegal Installation of Windows NT Server and Other Microsoft Products Prompts Swift Action

REDMOND, Wash. - July 30, 1997 - Microsoft Corp. today announced it has filed a lawsuit against 21st Century Solutions Inc. of Omaha, Neb., an information systems reseller and former Microsoft® Solution Provider, for copyright and trademark infringement and breach of contract.

The lawsuit, which also names the company's principal, Suchindran Chatterjee, was filed in U.S. District Court in the District of Nebraska and is the result of an investigation launched following customer complaints to Microsoft's Anti-Piracy Hotline. It alleges that 21st Century Solutions loaded unauthorized copies of the Microsoft Windows NT® Server network operating system, the Microsoft Windows® 95 operating system and Microsoft Office Professional Edition onto computers and servers that it sold.

Iowa-based Premier Health Associates called the Microsoft hot line after employees were unable to obtain proof of the legitimacy of software provided by 21st Century Solutions. "I knew there was something wrong," said Lynn Peterson, president of Premier Health Associates. "I tried over and over to get the disks and the software licensing that I needed to be legal. Mr. Chatterjee simply never provided them. It's just unacceptable."

Premier subsequently filed a lawsuit against 21st Century Solutions and Chatterjee alleging breach of agreement and fraud. That lawsuit is pending in Iowa District Court for Polk County.

Microsoft Solution Providers are specially trained and certified by Microsoft to provide computer systems and technology solutions to businesses, using a variety of Microsoft products. As part of the Solution Provider agreement, the member agrees to make every effort to prevent the unauthorized duplication or pirating of Microsoft products and to take all available steps to protect against piracy.

When Microsoft determined that 21st Century Solutions had violated the terms of its agreement as a certified Microsoft Solution Provider, the reseller was dropped from the program.

"As a Microsoft Solution Provider providing custom software on Windows NT, we take the issue of software piracy very seriously," said Brenda Young, vice president of sales, Coyote Software Inc. of Omaha, Neb. "When Microsoft takes an action like this, it supports the confidence of the marketplace in the quality and integrity of all the legitimate Microsoft Solution Providers."

The 21st Century Solutions case is similar to several other civil cases Microsoft has brought recently against North American resellers for unlicensed installation of Windows NT Server.

"The increasing popularity of our BackOffice® family of products unfortunately also means an increase in piracy," said Jim Lowe, Microsoft corporate attorney. "We recently launched a nationwide campaign to confront resellers who 'hard-disk load' our client/server software products. To date, the 21st Century case is one of worst abuses of software licensing that we've investigated."

Microsoft receives more than 2,000 calls each month that are reviewed by investigators to identify computer retailers and end users who are using or distributing Microsoft software illegally. In addition to increasing enforcement efforts, Microsoft is working to help consumers recognize warning signs that could indicate they are acquiring illegal or counterfeit software, such as the following:

• 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, (800) RU-LEGIT (785-3448), 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.

Microsoft, Windows NT, Windows 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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