Microsoft Settles Lawsuit Against Seattle-Area Software Reseller

Company Agrees to Replace Customers' Counterfeit Product

REDMOND, Wash. - Nov. 26, 1997 - Microsoft Corp. today announced it has settled a copyright and trademark infringement lawsuit filed against Able Computer Systems Inc., a computer system builder and reseller of computer software, and principals Chunwan Lai and Dershaiun Lai of Kirkland, Wash.

The settlement follows the filing last July of a lawsuit in U.S. District Court in the Western District of Washington and is the result of an investigation launched by Microsoft following numerous customer complaints received on its anti-piracy hot line. In the lawsuit Microsoft alleged that Able Computer Systems distributed counterfeit copies of Microsoft® software products including the Windows® 95 operating system, Office 97 Professional Edition and various Microsoft hardware products.

In the settlement, Able agreed to pay Microsoft $50,000. More important, Microsoft required that Able notify its customers who have received any Microsoft software or hardware that they may have received counterfeit product and should contact Able or the Microsoft anti-piracy hot line for possible replacement. This is the first time a Washington-based company has agreed to replace counterfeit products as part of a settlement agreement.

"Obviously the problem of counterfeit product getting into the channel is serious," said Lou August of Trinity Technology Inc. in Redmond, Wash. "We are pleased that Microsoft is looking out for its customers and attempting to clean up the channel by demanding that counterfeit product be replaced."

This case is similar to several other civil cases Microsoft has brought recently against North American resellers for unauthorized distribution of Microsoft software. In September, the company filed lawsuits against eight Los Angeles-area computer resellers, charging copyright and trademark infringement and alleged distribution of counterfeit Microsoft products.

"We launched this nationwide campaign specifically to confront resellers who distribute counterfeit software products," said Brian McEachron, corporate attorney for Microsoft. "This case illustrates that counterfeit software is a huge problem, even in Microsoft's own back yard."

Microsoft receives more than 2,000 calls and e-mails 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
• Microsoft products on the retail shelf should never include a line on the front cover of the users guide that states, "For distribution with a new PC only.," because Microsoft's agreements with computer manufacturers prohibit them from distributing Microsoft software without accompanying PC hardware.
• Companies that build PCs and want to obtain Microsoft OEM product for inclusion with their systems should obtain product only from Microsoft's 11 authorized Delivery Service Partners. A list of DSPs is available at http://www.microsoft.com/oem/.

Customers or resellers with questions about the legitimacy of Microsoft products should contact the Microsoft anti-piracy hot line, (800) RU-LEGIT (785-3448), send e-mail to piracy@microsoft.com, or visit Microsoft's Web site at http://www.microsoft.com/piracy/default.asp. For more information about software piracy, call the Business Software Alliance (BSA) anti-piracy hot line at (888) NO PIRACY (667-4722), send e-mail to software@bsa.org, or visit its Web site at (http://www.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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