Microsoft Files Lawsuits Against Five Missouri Resellers, Alleging Software Piracy

Lawsuits Affirm Company's Commitment to Protect State's Consumers and Legitimate Resellers

ST. LOUIS - Nov. 16, 1998 - Microsoft Corp. officials today announced they have filed lawsuits against five computer resellers in the St. Louis area, alleging copyright violations and trademark infringement. Filed in U.S. District Court for the Eastern District of Missouri, the suits are the result of ongoing investigations of area businesses and are conducted to help protect legitimate distributors and customers from the effects of software piracy in Missouri.

Three area companies allegedly distributed counterfeit copies of the Microsoft® Windows® 95 operating system and Microsoft Office 97 Professional; they also allegedly sold computers with unauthorized copies of Windows 95 and Office 97 Professional installed, a practice known as "hard disk loading." The companies include Gam Corp., dba Computer Renaissance of St. Peters (Case No. 4:98CV01892DJS); Laclede Computer Trading Company of St. Louis (Case No. 4:98CV01888CDP) and PC House Inc. of St. Louis (Case No. 4:98CV01886DDN).

The fourth complaint alleges that United Computer Technology Inc. of St. Louis (Case No. 4:98CV01887TCM) distributed counterfeit copies of Windows 95 and Office 97 Professional. In Microsoft vs. Buol Communications Inc., dba Ci Computers of Webster Groves (Case No. 4:98CV01889CEJ), defendants allegedly hard disk loaded and allegedly distributed counterfeit Office Professional 97.

In these types of cases, Microsoft customarily notifies the defendants that it suspects them of acting illegally and then determines whether this behavior has continued before filing a lawsuit.

"Both hard disk loading and distribution of counterfeit product by resellers hurt the ability of the software industry in Missouri to prosper, as evidenced by the loss of an estimated 2,600 jobs and more than $200 million in combined lost wages, tax revenues and retail sales in the state last year," said Nancy Anderson, senior corporate attorney at Microsoft. "By enforcing the legal use of software, we hope to promote the success of the honest software companies in the state."

The companies were investigated as a result of tips to the Microsoft anti-piracy hot line, most of which are received from honest resellers or from customers who obtain suspicious products. Microsoft receives more than 2,000 calls and e-mail messages each month that are reviewed by investigators to identify computer resellers and end users that are using or distributing Microsoft software illegally.

"One of our clients ran across Office Pro in the reseller channel for $80. We knew it couldn't be genuine product, and Microsoft confirmed our suspicion that it was likely counterfeit," said John Huff, president and CEO of J. Norman Consulting Inc., a St. Louis information technology firm. "In addition to putting our customers at risk, software piracy and counterfeiting among resellers gives illegal operators an unfair competitive advantage over companies that obey the law."

Microsoft encourages consumers to become familiar with the warning signs that can help them identify counterfeit or illegal software.

• Prices that are "too good to be true." These may indicate counterfeit product or product that has been misdirected, such as product authorized for distribution only to educational institutions but is being offered to the general public.
• Backup disks or CD-ROMs with handwritten labels, or components that appear to be of inferior quality
• Manuals that appear to be photocopied or are of inferior quality
• Products marked with a phrase, such as "For distribution with a new PC only," "Special CD for licensed customers only," "Not for retail or OEM distribution" or "Academic price - not for use in a commercial environment," that does not describe the transaction.

In addition, when users acquire a new computer system, it will include operating system software. If that software is the Microsoft Windows 98 operating system, it will be accompanied by a user manual that incorporates a Certificate of Authenticity as the cover. The customer will also receive a CD-ROM with the software program. There must be an end-user license agreement (visible online when the program is first run). If any of these elements is missing, the product is suspect.

Customers or resellers with questions about the legitimacy of Microsoft products should contact the Microsoft anti-piracy hot line toll free at (800) RU-LEGIT (785-3448) or send e-mail to piracy@microsoft.com. They can obtain more information about software piracy by calling the Business Software Alliance (BSA) anti-piracy hot line at (888) NO PIRACY (667-4722) or sending 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 and Windows 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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