Microsoft Acts to Thwart Software Piracy in Wisconsin

Company Files Lawsuits Against Four Resellers in Wisconsin, Where Nearly 25 Percent of Distributed Software Is Illegal

MILWAUKEE - March 8, 2000 - Microsoft Corp. today announced that the company has filed lawsuits against four resellers in Wisconsin as part of its ongoing efforts to protect consumers and legitimate resellers and to lessen the negative effects of software piracy on Wisconsin's economy. The four resellers allegedly distributed counterfeit and/or infringing Microsoft® software.

Wisconsin has a piracy rate of 25 percent, the same as the average piracy rate in the United States. This means that one in four computers is running pirated software in Wisconsin. According to a recent study by International Planning & Research Corp., in 1998 Wisconsin lost almost $79 million in combined wage, salary and tax revenue to software piracy. The state also lost more than 2,400 jobs due to the severe impact of the distribution of illegitimate software, as well as more than $11 million in tax revenue - money that otherwise could have contributed to local and state improvement projects.

"The impact of software piracy is threatening the welfare of legitimate businesses along the distribution chain. It's nearly impossible to compete with the 'too good to be true' prices some are offering these days," said Kathy Mengel, president of Integrated Systems Group. "We appreciate the steps Microsoft is taking to level the playing field."

Software piracy has a significant impact on state and local economies across the country, as well as throughout the world. According to a study by Nathan Associates commissioned by the Business Software Alliance (BSA), software piracy cost the national economy 109,000 jobs, $4.5 billion in wages and nearly $1 billion in lost taxes during 1998.

Investigations are often initiated as a result of tips to Microsoft's anti-piracy hot line. These tips are typically phoned in from honest resellers or from consumers who acquire or hear about suspicious software.

All of the Wisconsin lawsuits allege that the defendants distributed counterfeit and/or infringing copies of Microsoft software or software components to investigators and/or customers. The complaints are as follows:

Filed in the United States District Court for the Eastern District of Wisconsin:

• Brookfield Computers of Brookfield and Milwaukee allegedly distributed counterfeit components of Office Professional 97 and the Microsoft Windows® 95 operating system (Case No. 00-C-0323).
• Nourse Direct (aka Search4u.org) of Milwaukee allegedly distributed counterfeit Windows 98 and counterfeit components of Office Professional 97 (Case No. 00-C-0324).
• TLC Computer Services Inc. of Williams Bay allegedly distributed counterfeit Windows 95 and counterfeit components of Office Professional 97 (Case No. 00-C-0325).

Filed in the United States District Court for the Western District of Wisconsin

• Ram Computer Outlet of Eau Claire allegedly distributed counterfeit Office Professional 97 (Case No. 00-C-126S).

"In order to protect consumers, the honest channel and the economy, Microsoft will continue to take action against companies that repeatedly place their customers at risk by distributing illegal software," said Janice Block, Microsoft corporate attorney. "We are dedicated to thwarting piracy and appreciate the support and assistance of honest business people and consumers."

Through the implementation of new anti-counterfeiting features, Microsoft is taking steps to make counterfeit software easier to spot and to assist honest resellers and OEM system builders in distributing genuine software.

Microsoft has recently announced new anti-counterfeiting features for Windows 2000, including an edge-to-edge CD-ROM hologram and a new certificate of authenticity (COA) label. These features will make it more difficult for counterfeiters to pass off counterfeit software as genuine to unsuspecting customers.

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"
• Suspicious methods of delivery and/or payment
• Retail products distributed in jewel cases only, rather than in full-color retail boxes
• Products marked with a phrase, such as "For distribution with a new PC only" or "Special CD for licensed customers only," that does not describe the transaction.

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.

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