Microsoft Files Actions Against Five Resellers in Florida

Software Piracy Costs Sunshine State More Than 7,000 Jobs

MIAMI - Oct. 5, 1999 - Microsoft Corp. today announced that the company has filed lawsuits against five resellers in the state of Florida. The lawsuits are part of Microsoft's ongoing efforts to protect legitimate software distributors and customers from the negative effects of software piracy and to lessen the impact of software piracy on both state and national economies. The lawsuits were filed against five computer resellers in the Tampa and Miami/Fort Lauderdale areas for alleged distribution of counterfeit software and/or the installation of unlicensed software on computers.

According to a recent study by International Planning & Research Corp., Florida's software piracy rate of 35.5 percent is nearly 11 percentage points above the national average and ranks as the sixth most negatively impacted state for tax and wage losses caused by software piracy. In 1998, Florida lost over 7,000 jobs and approximately $194 million in wages and salaries. Additionally, the state lost more than $52 million in tax revenue, money that otherwise could have gone to local and state improvement projects.

"The impact of software piracy is threatening the welfare of legitimate businesses. It's nearly impossible to compete with the low prices disreputable software distributors are advertising these days. These prices are just too good to be true," said Thomas Ewing, vice president and general manager of Compuquip. "We appreciate the steps Microsoft is taking to level the playing field. The distribution of counterfeit software and the problems associated with those products - including missing code, potential viruses and no technical support - have harmed the reputation of the distribution channel."

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 customarily notifies a company that it is suspected of acting illegally and asks the company to stop the illegal activity. Microsoft then determines whether the suspect company has continued its illegal activity before filing a lawsuit. The complaints allege hard disk loading or the distribution of counterfeit software or software components to investigators and/or customers. Filed in the U.S. District Court for the Middle and Southern Districts of Florida, the complaints are as follows:

• Computer Works of Sarasota allegedly hard disk loaded and distributed counterfeit components of Office 97 Professional Edition, and hard disk loaded and distributed counterfeit Microsoft® Windows® 95 (Case No. 99-2057 CIV-T-26E).
• Microline Computers & Parts of North Miami allegedly hard disk loaded Office 97 Professional and the Windows 98 operating system (Case No. 99-2639-CIV-JORDAN).
• Ortel Wireless Corporation of Hollywood allegedly hard disk loaded and distributed counterfeit components of Office 97 Professional (Case No. 99-7298-CIV-RYSKAMP).
• Pro-Line Software Inc. of Hallandale allegedly distributed counterfeit components of Office 97 Professional, Windows 95 and Windows 98 (Case No. 99-7297-CIV-HIGHSMITH).
• Thunder Technology Inc. of Lutz allegedly distributed counterfeit components of Office 97 Professional and counterfeit Windows 95 (Case No. 99-2058 CIV-T-26E).

"Software piracy stifles innovation and the growth potential of the economy of the Sunshine State. In addition, it has a negative impact on the honest distribution channel, as well as consumers who are receiving unpredictable and oftentimes nonfunctional software. Microsoft will continue to take action against companies that repeatedly place their customers at risk of receiving illegal software," said Nick Psyhogeos, Microsoft corporate attorney.

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.

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