Microsoft Files Suit Against Five Illinois Businesses for Alleged Distribution of Counterfeit Software

Area Businesses and Consumers Invited to Help Thwart Software Piracy On "Be Sure It's Legal" Day

CHICAGO - Oct. 14, 1999 - Microsoft Corp. today announced that the company has filed lawsuits against five computer resellers in the state of Illinois. The lawsuits are part of Microsoft's ongoing efforts to protect legitimate software distributors and consumers 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 for alleged distribution of counterfeit Microsoft® software and/or the installation of unlicensed software on computers.

According to a recent study by International Planning & Research Corp., Illinois lost more than $241 million in combined wage, salary and tax revenue in 1998, making it one of the top 10 states with the highest wage, salary and tax losses due to software piracy. During the same year, Illinois lost more than 5,400 jobs due to software piracy.

In an effort to heighten awareness among the Chicago business community and consumers about intellectual property, proper software licensing and software piracy issues, Microsoft will be hosting "Be Sure It's Legal" Day in Chicago on Tuesday, Oct. 19. Microsoft encourages customers who suspect they have obtained counterfeit software to bring the software to the James R. Thompson Center (State of Illinois Building), located at 100 W. Randolph St. in downtown Chicago, on Tuesday, Oct. 19, between 9 a.m. and 3 p.m. Microsoft will have product identification specialists on hand to evaluate suspect software and provide information to local businesses and consumers about proper software licensing. Local resellers will be available to discuss software asset management. There will be a limited supply of free gifts, so consumers are invited to come early and bring suspected counterfeit software - with proof of purchase - to have Microsoft's software identification specialists evaluate it and address any questions.

"We have consistently lost revenue to businesses that distribute counterfeit software or sell systems with preloaded pirated software," said Dennis Gorecki, sales manager for NBS Inc. in Willowbrook, Ill. "We applaud Microsoft's efforts to help level the playing field for honest distributors. Microsoft should also be commended for its education efforts - resellers and customers now have the tools needed to acquire and manage software legally."

All five of the lawsuits allege that the defendants distributed counterfeit copies of Microsoft software or software components to investigators and/or customers. One of the suits alleges that the defendant distributed computer systems after hard disk loading, the practice of loading unauthorized copies of software onto the hard drives of computers that are sold to customers. The following complaints were filed in the United States District Court for the Northern District of Illinois, Eastern Division:

• Century Computer Systems of Schaumburg allegedly distributed counterfeit components of the Microsoft Windows® 95 operating system and of Office 97 Professional Edition (Case No. 99 C 6655).
• Computer Doctor Inc. of Homewood allegedly distributed counterfeit Windows 95 and components of Office 97 Professional (Case No. 99 C 6653).
• Regenesis Technology Inc. of Matteson allegedly hard disk loaded and distributed counterfeit components of Windows 98 and of Office 97 Professional (Case No. 99 C 6654).
• Worldwide Computer Solutions Inc. of Streator allegedly distributed counterfeit Windows NT® Workstation 4.0 and Office 97 Professional (Case No. 99 C 6656).

The following complaint was filed in the United States District Court for the Southern District of Illinois:

• CTI Group of Effingham allegedly distributed counterfeit Office 97 Professional and components of Windows for Workgroups 3.11 (Case No. 99-4238JPG).

"Counterfeiting and illegally selling software has a severe negative impact on consumers and threatens the health of businesses throughout the distribution chain," said Janice Block, corporate attorney for Microsoft. "Microsoft is dedicated to thwarting software piracy through education programs and enhanced security features, and by taking legal action against those who distribute counterfeit software. We're committed to making a difference."

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 software piracy recoveries. Funds will be donated to a variety of nonprofit organizations 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

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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