Five Michigan Businesses Allegedly Distributed Counterfeit Microsoft Software

Microsoft Takes Legal Action to Stop the Sale of Pirated Software

REDMOND, Wash. - March 15, 2000 - Microsoft Corp. today announced that it has filed software piracy lawsuits against five companies in Michigan as part of the company's continued commitment to protect legitimate distributors and customers from the negative impact of software piracy. The lawsuits, alleging copyright violations and trademark infringements, were filed against businesses for allegedly distributing counterfeit and/or infringing Microsoft® software.

"We lose a significant portion of our business every year to resellers who sell illegal software. This makes it very difficult for legitimate software resellers to compete in Michigan," said Don Streng of Xycom Inc. "We fully support Microsoft and the software industry in their fight against software pirates and appreciate their efforts to level the playing field to help businesses like mine survive and prosper. In addition to reducing the number of resellers illegally undercutting prices, rooting out the software pirates also saves us time and effort when searching for new legitimate suppliers."

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 International Planning & Research Corp., nearly one in five computers in Michigan is running illegal software. The same study also reveals that in 1998 Michigan lost more than 5,000 jobs to software piracy, translating to more than $187 million in lost wages and salaries for local employees. The state also lost more than $27 million in state tax revenues -- money that otherwise could have contributed to local and state improvement projects.

"To alleviate the harmful effect software piracy has on Michigan's economy and to protect consumers and resellers from the risks of pirated software, it is vital that businesses, consumers and the government all work together to combat software piracy," said Janice Block, corporate attorney for Microsoft. "Microsoft is helping this effort by providing education and awareness programs, enhanced security features in software, working with law enforcement to thwart counterfeiters and taking legal action against those who distribute counterfeit software."

Tips called in to the Microsoft anti-piracy hot line by customers or other resellers who have obtained suspicious software initiate most investigations. 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 suspected company has continued its illegal activity before filing a lawsuit.

All of Microsoft's 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 Michigan:

• Affordable Computers Inc., located in Ann Arbor and on the Internet at www.affordablecomputers.com, for allegedly distributing counterfeit Microsoft Windows® 95 and counterfeit components of Office 97 Professional Edition (Case No. 00-71286).
• Cyberdyne Technology Inc., located in Brighton and on the Internet at www.cyberdynetech.com, for allegedly distributing counterfeit components of Office Professional 97 (Case No. 00-71288).
• Mr. Software Inc., located in Sterling Heights, for allegedly distributing counterfeit components of Office Professional 97, Windows 95 and Windows NT® Workstation (Case No. 00-71285)
• Nova Computer Company, located in Auburn Hills, for allegedly distributing counterfeit components of Office Professional 97 (Case No. 00-71287).

Filed in the United States District Court for the Western District of Michigan:

• Force Systems Inc., located in Traverse City, for allegedly distributing counterfeit components of Office Professional 97 (Case No. 1:00CV171).

"Resellers who deal in counterfeit software often dramatically reduce the prices to draw consumers in," said Curt Hicks, president of Center for Computer Resources (CCR). "Customers need to understand that if they see a software product offered at a price that seems too good to be true, then 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 critical software code, and making users ineligible for technical support and upgrades, not to mention the potential legal ramifications."

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 the Windows 2000 operating system, 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 software distributed in jewel cases only, rather than in full-color retail boxes
• Software 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.

About Microsoft

Founded in 1975, Microsoft (Nasdaq "MSFT") is the worldwide leader in software for personal and business computing. The company offers a wide range of products and services designed to empower people through great software -- any time, any place and on any device.

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