Microsoft Alleges That Four Utah Businesses Distributed Counterfeit Software

Utah's Piracy Rate Rises to 41 Percent, Becoming One of the Highest in the Country

REDMOND, Wash. - Sept. 15, 1999 - Microsoft Corp. today announced that the company has filed software piracy lawsuits against four Utah companies. The lawsuits, alleging copyright violations and trademark infringements, were filed against software distributors in the Salt Lake City and Orem areas for allegedly distributing counterfeit Microsoft® software. A result of the company's ongoing anti-piracy efforts, the lawsuits are aimed at protecting Utah's legitimate distributors and customers from the negative effects of software piracy. According to a recent study by International Planning and Research (IPR), the software piracy rate in Utah increased more than 5 percent since 1997, from 35 percent to 41 percent in 1998.

"We lose a significant portion of our business every year to unscrupulous resellers who care only about making a quick dollar," said Charles Van Ausdal, owner of Micro Domain. "Customers need to understand that if they see a software product offered at a price that seems too good to be true, it probably is. In the long run, pirated products can cost consumers a lot more through increasing the potential for obtaining viruses, missing key elements including software code, and making users ineligible for valuable technical support, warranty protection and upgrades."

The IPR study also reports that software piracy cost Utah more than 1,600 jobs and more than $72 million in combined wages and tax revenue in 1998. According to a recent Business Software Alliance (BSA) study, the United States' software piracy rate of 25 percent cost the economy 109,000 jobs, $4.5 billion in wages and nearly $1 billion in lost taxes during the same year.

"It's alarming that the piracy rate in Utah is so far above the national average - more than two of every five copies of software being used in Utah are illegal," said Peter R. Genereaux, president and CEO of the Utah Information Technologies Association (UITA). "To alleviate harmful effects of piracy to our state's economy it is vital that businesses, consumers and the government all work together to combat software piracy."

All of the lawsuits allege that the defendants distributed counterfeit copies of Microsoft software to investigators. The complaints are as follows:

Filed in the United States District Court for the District of Utah, Northern:

• Equipment Research Inc. dba Computer Junkies aka Intellitrends of Bountiful allegedly distributed counterfeit Office 97 Professional and components of the Microsoft Windows® 95 operating system (Case No. 1:99-CV-00104K).

Filed in the United States District Court for the District of Utah, Central:

• Computer Lane of Orem allegedly distributed counterfeit components of Office 97 Professional Edition (Case No. 2:99-CV-0712J).
• Marketing Data Inc. dba LS Micro of West Valley City allegedly distributed counterfeit Windows 95 and counterfeit components of Office 97 Professional (Case No. 2:99-CV-0713C).
• PC 3000 Inc. dba Hollywood PC of West Valley City allegedly distributed counterfeit Windows 95 and counterfeit components of Office 97 Professional (Case No. 2:99-CV-0714G).

Most of the businesses named in the complaints were investigated as a result of tips to the Microsoft anti-piracy hot line. The tips are typically phoned in from honest resellers or from consumers who acquire suspicious products. According to allegations in the complaints, each of the defendants continued to distribute unauthorized Microsoft software even after receiving a written request from Microsoft to stop unlawful activities.

Microsoft has announced that, in addition to its other community affairs activities, it plans to donate an estimated $25 million over the next five years - half of its anticipated software piracy recoveries during that time period - to nonprofit organizations worldwide focused on providing access to technology for disadvantaged communities.

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"
• 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 incorporating a Certificate of Authenticity as the cover as well as backup media and an end-user license agreement that 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/. 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 by sending e-mail to software@bsa.org.

About Microsoft

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