Microsoft Files Lawsuits Against Three Resellers in Minnesota

Investigative Efforts Affirm Company's Commitment to Protecting Stat's Consumers And Legitimate Resellers

REDMOND, Wash. - Feb. 10, 1999 - Microsoft Corp. officials today announced the company has filed lawsuits against three computer resellers in Minnesota, alleging copyright violations and trademark infringement. The lawsuit are the result of the company's first anti-piracy investigations, which were conducted to help protect Minnesota's legitimate distributors and customers from the effects of software piracy.

The companies were investigated as a result of tips to the Microsoft anti-piracy hot line by honest resellers or customers who obtained suspicious products. In such 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.

Lawsuits against First Micro Group Inc. of Minneapolis (Civil No. 99-173 JRT/FLN) and Orion Systems of Minneapolis (Civil No. 99-172 JMR/FLN) were filed for the companies' alleged distribution of counterfeit copies of Microsoft® Office 97 Professional and the Microsoft Windows® 95 operating system. In addition, Retreads Inc., dba Computer Renaissance, of Rochester, Minn. (Civil No. 99-174 PAM/JGL), allegedly hard-disk-loaded computers with unauthorized copies of Office 97 Professional. Hard-disk-loading is the installation of unlicensed software onto a computer's hard disk before it is sold to a customer. All three lawsuits were filed in the U.S. District Court for the District of Minnesota.

"Microsoft is helping to lessen the harmful effects of software piracy on my business by filing suits against Minnesota companies that engage in illegal activities," said Gordon T. Sween, consulting services manager for Software Spectrum Technology Services Group of Minneapolis/St. Paul. "The industry's success is at risk from piracy, and we should all work to provide customers with information about the dangers of piracy and the benefits of having compliant licenses."

Microsoft cautions that consumers who acquire pirated products could find they are missing key elements, such as user manuals and product identifications, Certificates of Authenticity and even software code. Customers may also find that pirated software contains viruses. Microsoft is continually researching the viability of new anti-piracy technologies that create more value for customers while maintaining the integrity of the distribution channel and reducing the costs of piracy.

"Minnesota lost over 3,000 jobs and $340 million in combined wages, tax revenues and retail sales in 1997, and a significant portion of those jobs and revenues rightfully belong to honest businesses," said Janice Block, Microsoft corporate attorney. "We are encouraged that resellers and organizations such as the Minnesota High Tech Association (MHTA) are pulling together to increase awareness about the detrimental effects of intellectual property theft and to promote the advancement of technology in the state."

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.
• Back-up 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 onscreen 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. In addition, a list of authorized distributors and details regarding the Original Equipment Manufacturer (OEM) System Builder program is available at http://www.microsoft.com/oem/. Consumers can obtain more information about software piracy by calling the Business Software Alliance 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.

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