Microsoft Files Lawsuits Against Software Distributors in San Diego For Alleged Distribution of Counterfeit Software

Area Businesses and Consumers Encouraged to Help Defeat Software Pirates On "Be Sure It Is Legal" Day

REDMOND, Wash. - June 15, 1999 - Microsoft Corp. today announced that it has filed lawsuits against six computer resellers in the San Diego area that are alleged to have illegally distributed counterfeit software. The lawsuits are intended to protect legitimate distributors and customers from the increasing amount of counterfeit software in the area and to lessen the impact of software piracy on the San Diego economy.

In addition, Microsoft and KFMB Radio will be hosting "Be Sure It Is Legal" Day in San Diego on Friday, June 18, to discuss the software piracy problem in the area and to provide information to local businesses and consumers about proper software licensing. Microsoft encourages customers who suspect they might have obtained counterfeit software to bring it to the parking lot of KFMB Radio, located at 7677 Engineer Road, on June 18 between 7 a.m. and 3 p.m. PDT. Microsoft product ID specialists will be on hand to evaluate the software, and local resellers will be available to discuss software asset management. There will be food, drawings for tickets to that night's San Diego Padres vs. Pittsburgh Pirates game, Microsoft® software and more.

"We lose a considerable amount of business to disreputable software distributors each year, and from what we've seen, the distribution of counterfeit software seems to be on the rise in the Southern California area," said Lance Wren, San Diego branch manager for SoftChoice Corp. "We applaud Microsoft's efforts to not only help level the playing field for honest distributors, but to help both resellers and customers make informed decisions about acquiring and managing software legally."

The six complaints in San Diego allege that the defendants distributed counterfeit Microsoft software to undercover investigators, and two of them also allege that defendants "hard disk loaded" unauthorized copies of Microsoft software onto the hard drives of computers they sold. The complaints, which were filed in the U.S. District Court for the Southern District of California, are as follows:

• Computer 4 Less of San Diego allegedly distributed counterfeit Microsoft Office Professional 97, and the Microsoft Windows® 98 and Windows 95 operating systems (Case No. 99cv 1199 S CGA).
• Compuworld of San Diego allegedly distributed counterfeit Office Professional 97 and hard disk loaded Office Professional 97 (Case No. 99cv 1195 JM POR).
• Electronic Computer System LP, dba Elect. Computer System & Service, dba ECS, dba Enhanced Computer System of San Diego, allegedly distributed counterfeit Windows 98 and Office Professional 97 and allegedly hard disk loaded Windows 98 (Case No. 99cv 1198 S POR).
• Micro Chip Computers dba Micro Chip 2 of San Diego allegedly distributed counterfeit Windows 98 and Office Professional 97. (Case No. 99cv 1207 J AJB).
• Monitor Computer Services dba Monitor Computer Sales & Service of San Diego allegedly distributed counterfeit Office Professional 97 (Case No. 99cv 1200 S AJB).
• Power Comp System Integrations dba Power Comp Technologies of San Diego allegedly distributed counterfeit Office Professional 97, Windows 98 and Windows 95 (Case No. 99cv 1208 S LAB).

"There is an immense need to educate consumers, particularly in small and medium-sized businesses, about the importance of knowing how to avoid purchasing illegal software as well as how to ensure license compliance," said Anne Murphy, Microsoft corporate attorney. "Unfortunately, as evidenced by the recent bust in Paramount where $56 million worth of Microsoft software was found and eight people were indicted by a federal grand jury, Southern California is a hotbed for counterfeiting. Customers need to take extra caution to avoid being duped and putting their information systems at risk, which is why we are organizing 'Be Sure It Is Legal Day' for the benefit of San Diego-area consumers."

According to data gathered by International Planning and Research Corp. of Redmond, California's economy has suffered serious losses to software piracy. The state lost more than 18,000 jobs and more than $2.5 billion in combined lost wages, tax revenues and retail sales in 1997, including more than $170 million in state taxes that instead could have contributed to local and state improvement projects.

Microsoft cautions that, in addition to the increased potential for viruses, consumers who acquire pirated software 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. Customers with pirated software are also ineligible for technical support or upgrades. Microsoft continually researches the viability of new anti-piracy technologies, such as the holograms on the hub of Windows 98 and Office 2000 CD-ROMs, to maintain the integrity of the distribution channel and reduce the costs of piracy.

Consumers and resellers are encouraged to become familiar with the warning signs that can help them identify counterfeit or illegal software:

• Prices that are "too good to be true"
• 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
• Software 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

• Microsoft OEM Windows 98 or OEM Office 2000 that is not accompanied by a user manual that incorporates a Certificate of Authenticity as the cover, as well as back-up media and an end-user license agreement, which is visible on-screen when the programs are first run

Customers or resellers with questions about the legitimacy of Microsoft software 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 OEM System Builder program are available at http://www.microsoft.com/oem/.

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.

Note to editors: If you are interested in viewing additional information on Microsoft, please visit the Microsoft Web page at http://www.microsoft.com/presspass/ on Microsoft's corporate information pages.