Microsoft Intensifies Efforts to Eradicate Counterfeit Software in California

Company Joins Forces With Better Business Bureau To Help Protect Consumers and Resellers

SAN DIEGO, Sept. 12, 2000 — At a joint press conference today in San Diego with the Better Business Bureau, Microsoft Corp. announced that it has taken legal actions against five computer resellers across the state of California. These companies, located in the greater San Diego, Los Angeles and San Francisco areas, allegedly distributed counterfeit and/or infringing copies of Microsoft® software. Microsoft has taken these legal actions in order to protect consumers from the negative effects of acquiring bogus software.

"Microsoft and other companies are continuing an all-out anti-piracy program which informs consumers that the people who pirate software are, in the opinion of the Better Business Bureau, nothing more than thieves, and consumers dealing with these people are accepting stolen merchandise," said Gerry Wilson, president and CEO of the San Diego Better Business Bureau. "The BBB recommends consumers thoroughly know about the products they are buying and deal only with legitimate companies."

All of the lawsuits allege that the defendants distributed counterfeit and/or infringing copies of Microsoft software or software components to investigators and/or customers on numerous occasions. Despite receiving cease and desist letters from Microsoft alerting them to their illegal activities and asking them to stop the distribution of counterfeit software, the defendants in all the cases continued their illegal actions. One of the defendants, Access Publishing Computer Software, is alleged to have distributed software at computer trade shows all over California -- including shows in Oxnard, Bakersfield, Oakland, Sacramento, Vallejo and Fresno -- and to have distributed counterfeit and/or infringing copies of Microsoft software at some of these shows. Another defendant, North Coast Pacific Inc., was allegedly reported to Microsoft's anti-piracy hot line on at least 15 occasions for the distribution or advertisement of suspicious software, which led to further investigations of the company and ultimately to legal action.

The complaints are as follows:

Filed in the U.S. District Court for the Northern District of California:

• A & A Technology of Fremont allegedly distributed counterfeit copies of Microsoft Office Pro 97 and Windows® 98 (Case No. C-00-03255-MMC).
• Access Publishing Computer Software (dba AP Software), based in San Bruno and Berkeley, allegedly distributed counterfeit copies of Microsoft Office Pro 97, Windows 95, Windows NT® Workstation, Windows 98 and Office Pro 2000 (Case No. C-00-03254-JCS).

Filed in the U.S. District Court for the Southern District of California:

• North Coast Pacific Inc. (dba Software Direct), located in Vista and Encinitas, allegedly distributed counterfeit copies of Microsoft Office Pro 97 (Case No. 00-CV-1826-BTM(NLS)).
• PCH Distribution, located in San Diego, Solana Beach and Encinitas, allegedly distributed counterfeit Microsoft Windows 95, Windows 98, Office Pro 97 and Office 2000 (Case No. 00-CV-1827-E(LSP)).

Filed in the U.S. District Court for the Central District of California:

• Microlink Enterprise Inc., located in City of Industry, allegedly distributed counterfeit Microsoft Windows 95 and Office Pro 2000 (Case No. CV 00-9625-FMC(CWx)).

The Business Software Alliance (BSA), a software industry watchdog group, recently announced a truce period in San Diego during which end users, including small businesses, are encouraged to review their software and ensure its compliance. Throughout the truce the BSA will help companies become complaint without imposing penalties for past illegal software usage. As a BSA-member company, Microsoft is committed to supporting the BSA and making sure that companies taking advantage of the truce have a cleaner software distribution channel from which they can obtain genuine Microsoft software and licenses.

"TIG realizes our clients' challenge of staying current with software licensing. We recommend customers take advantage of consulting services to ensure compliance," said Vince Lamb, regional manager of Engineering Services for Technology Integration Group. "Clients who lack current licenses risk losing rights to technical support, warranty protection and upgrades provided by the product's manufacturer. It just makes business sense for consumers to utilize services like those we offer to ensure compliance."

As the current center of the U.S. counterfeiting industry, California has a piracy rate of 29.7 percent -- higher than the national average, according to a 1998 study conducted by International Planning & Research Corp. The IPR study also reports that software piracy cost California more than 18,000 jobs and over $1 billion in combined wages and tax revenues in 1998, ultimately stealing away resources that could otherwise contribute to local and state improvement projects.

"As a leader in the software industry, Microsoft has a responsibility to protect its consumers from being duped, and we take this duty seriously -- particularly in states like California where piracy not only harms consumers, but also has a grave impact on state and local economies," said Anne Kelley, senior corporate attorney for Microsoft. "In addition to taking legal action against those who persistently distribute counterfeit software, we're also dedicated to educating consumers and implementing innovative anti-counterfeiting features in our products to help consumers distinguish genuine software from counterfeit."

Lawmakers and businesses in California are working with the software industry to help thwart software piracy in the state. California is one of five U.S. states that have issued anti-piracy executive orders mandating the legal use of software in state government agencies. Furthermore, the mayors of San Diego and San Francisco have led the way in expressing their support for anti-piracy efforts by issuing "No Piracy" proclamations.

Customers or resellers with questions about the legitimacy of Microsoft products should contact the Microsoft anti-piracy hot line, toll free, at (800) RU-LEGIT (785-3448) or send e-mail to piracy@microsoft.com. Additional information on software piracy is available at http://www.microsoft.com/piracy/ . Consumers also can obtain more information 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 the Better Business Bureau of San Diego

Now celebrating its 78th year of service in San Diego County, the Better Business Bureau (BBB) is San Diego's largest countywide business organization. The Bureau promotes fair and ethical business standards that protect the marketplace to the benefit of the consumer and businessperson. The nonprofit organization, supported by more than 3,800 local member businesses, provides the largest free service of its kind to San Diego consumers with reports on more than 42,000 local businesses and brochures on a variety of topics. The BBB receives up to 1,000 phone calls a day, with most of the calls from consumers who want to make wise purchases and shop with confidence, and who are seeking prepurchase information on companies with whom they are considering doing business. Consumers who first inquire with the BBB before buying decisions are made represent approximately $4 billion in local purchases each year. Consumers can phone the Bureau's free 24-hour Consumer Helpline at (858) 496-2131 or

(800) 600-7050, or visit the Web site at www.sandiego.bbb.org, to obtain free information on local companies along with a list of BBB member companies in a particular type of industry.

About Microsoft

Founded in 1975, Microsoft (Nasdaq "MSFT" ) is the worldwide leader in software, services and Internet technologies 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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