Microsoft Files Software Piracy Lawsuits on Behalf of Customers And Resellers in Ohio

Recognizing Warning Signs Is Key to Avoiding Harmful Effects of Piracy

REDMOND, Wash. - April 26, 1999 - Microsoft Corp. officials today announced that the company has filed lawsuits against 10 resellers in Ohio for allegedly distributing counterfeit software. The lawsuits are intended to protect the region's legitimate distributors and customers from the negative effects of software piracy and to lessen the impact of software piracy on Ohio's economy, which has already lost more than $440 million in combined wages, tax revenues and retail sales and more than 6,000 jobs as a result of piracy.

"When nearly one in every three copies of software on Ohio's computers is illegal, it is obvious that software pirates are swallowing a big chunk of business that rightfully belongs to software distributors who play by the book," said John Cassiday, account executive at Softwarehouse International in Cleveland. "I'm glad that Microsoft is continuing its anti-piracy efforts in the area to ease the dangerous impact of software piracy to our business."

"We lose a significant amount of business to dishonest solution providers that dodge legal and ethical means of acquiring software," said Karen Hamilton, account manager at Corporate Sales Microcenter, a business consulting firm specializing in enterprise-level IT

solutions with offices in Columbus and throughout the Great Lakes region. "We see the lawsuits announced today as a positive step toward protecting businesses that obey the law, as well as preserving a healthy local technology industry that will ultimately benefit the community."

The lawsuits all allege that the defendants distributed counterfeit copies of Microsoft® software to undercover investigators. Four of the cases also allege hard disk loading, the practice of loading unauthorized copies of Microsoft software onto the hard drives of computers they sell.

Most investigations are initiated by tips called in to the Microsoft anti-piracy hot line by customers or other resellers who have obtained suspicious products. Microsoft customarily notifies the companies that it suspects them of acting illegally and then determines whether the behavior has continued before filing a lawsuit. The complaints are as follows:

• Adamant Computers Inc. of Cleveland allegedly distributed counterfeit copies of the Windows® 98 operating system and a Microsoft Mouse (Case No. 1:99 CV 966).
• Altim International Trading Co. of Cleveland allegedly distributed counterfeit copies of Windows 95, Windows 98, components of the Windows NT® Workstation operating system, and components of Office Professional 97 (Case No. 1:99 CV 965).
• Data Transfer and Explorer Micro Inc. of Worthington allegedly distributed counterfeit copies of Windows 95, Office Professional 97 and components of Office Professional 97 (Case No. C2-99-405).
• Ikon Technologies Inc. of Solon allegedly distributed counterfeit copies of Windows 95 and components of Office Professional 97 (Case No. 1:99 CV 960).
• Image Computer Services Inc. of Cleveland allegedly distributed counterfeit copies of Windows NT Server, components of Windows 95 and components of Office Professional 97 (Case No. 1:99 CV 964).
• Kat Micro Distributing Inc. of Cuyahoga Falls allegedly distributed counterfeit copies of Windows 95 and components of Office Professional 97 (Case No. 5:99 CV 967).
• Unicent Technologies Inc. of Aurora allegedly distributed as a result of an Internet order counterfeit components of Office Professional 97 and allegedly hard disk loaded Office Professional 97 (Case No. 5:99 CV 961).
• Arrow Corp. of Warrensville Heights allegedly distributed counterfeit copies of Windows 95 and allegedly hard disk loaded copies of Windows 98 (Case No. 1:99 CV 963).
• Computer Pro of Dayton allegedly distributed counterfeit components of Windows 98 and components of Office Professional 97 and allegedly hard disk loaded Windows 98 and Office Professional 97 (Case No. C3-99-173 ).
• Phoenix Computers of Warrensville Heights allegedly distributed counterfeit components of Windows 95 and components of Office Professional 97, and allegedly hard disk loaded Windows 95 and Office Professional 97 (Case No. 1:99 CV 962)

All suits were filed in the U.S. District Court for the Northern District of Ohio, except for the complaints against Data Transfer and Explorer Micro Inc. and Computer Pro, which were filed in the U.S. District Court for the Southern District of Ohio.

"Software piracy exposes unsuspecting customers to software that may contain harmful viruses and lack important documentation," said Tricia Boyle, account manager at Softmart Inc. "More than ever, it is vital that consumers and IT managers become cognizant of warning signs before acquiring software."

Microsoft cautions that, in addition to the increased potential for viruses, consumers who acquire pirated products could find they are missing key elements, such as user manuals and product identifications, Certificates of Authenticity, end-user license agreements and even software code. Microsoft continually researches the viability of new anti-piracy technologies, such as the hologram on the hub of the Windows 98 CD, to maintain the integrity of the distribution channel and reduce the costs of piracy.

Consumers should 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 should include operating system software. If that software is the Microsoft Windows 98 operating system, it should 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 on screen 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 are 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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