Microsoft Moves to Thwart Software Piracy in Oregon

Company Files Three Lawsuits to Protect Customers, Channel Partners And Intellectual Property

PORTLAND, Ore. - Sept. 23, 1999 - Microsoft Corp. today filed lawsuits against three software resellers in Oregon. The lawsuits are part of the company's ongoing efforts to protect legitimate software distributors and customers from the negative effects of software piracy and to reduce the toll it takes on the economy. The lawsuits were filed in Portland, Ore., against Key Computers Inc. of Tigard, International Computer-X-Press Inc. of Eugene and The Electronics Superstore (also known as Radio Shack) of Lincoln City for the alleged distribution of counterfeit software.

Prevalent across the country, software piracy has a significant impact on state and local economies. According to a recent software piracy study by International Planning & Research Corp. commissioned by Microsoft, Oregon lost 1,892 jobs in 1998, equating to more than $69 million in lost wages and salaries. Software piracy was also responsible for nearly $7 million in tax losses, money that otherwise could have supported local and state improvement projects.

"It's my understanding that nearly a quarter of the software loaded onto PCs in Oregon last year was never licensed, so I know my business - and every other legitimate guy's - is getting hit hard," said Paul Thompson, principal owner of ipt/ComputerLand. "I've checked out offers from so-called software distributors that were selling 'the real thing' for a fraction of the cost, and in every case I was told by Microsoft they were not legit. Whether or not you feel Microsoft needs any more money is beside the point, the law is quite clear."

Most investigations are initiated by tips called in to the Microsoft anti-piracy hot line by customers or other resellers who have obtained suspicious software. Microsoft received numerous telephone and email reports of piracy regarding the Oregon companies named in these lawsuits. Microsoft customarily notifies a company that it is suspected of acting illegally and asks the company to stop the illegal activity, as it did in these cases. Microsoft then determines whether the suspected company has continued its illegal activity before filing a lawsuit. The complaints allege the distribution of counterfeit software or software components to investigators and/or customers.

Filed in the U.S. District Court for the District of Oregon, the complaints are as follows:

• Key Computers Inc. allegedly distributed counterfeit Microsoft® Windows NT® Server software and counterfeit components of Office 97 Professional Edition software (Case No. CV 99-1323 KI).
• International Computer-X-Press Inc. allegedly distributed counterfeit Windows® 95, Windows 98, Office Pro 97, Windows NT Server and Windows NT Workstation software (Case No. CV 99-1325 JE).
• The Electronics Superstore (a k a Radio Shack) allegedly distributed counterfeit Office Pro 97 (Case No. CV 99-1324 AA).

"Like most crimes, illegal software distribution serves few at the expense of many - in this case, consumers, businesses and the economy as a whole," said Anne Murphy, Microsoft corporate attorney. "Microsoft will continue to prosecute counterfeiters and unlawful resellers, in addition to raising public awareness and teaching customers how and why to avoid pirated software."

Microsoft has announced that, in addition to its other community affairs activities, it expects 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. In 1998, software piracy caused losses to the U.S. economy amounting to nearly $1 billion in taxes and 109,000 jobs.

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 that incorporates 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 sending e-mail to software@bsa.org.

About Microsoft

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