Microsoft Intensifies Efforts to Crack Down On Counterfeit Software in Florida

Legal Action Taken to Bolster Honest Small Businesses and Reduce Risk to Consumers

TAMPA, Fla., Sept. 28, 2000 — Microsoft Corp. today announced that it has brought software piracy lawsuits against three software vendors in Florida for the alleged distribution of counterfeit and/or infringing copies of Microsoft® software. The businesses, located in the Tampa Bay and Orlando areas, allegedly persisted in the practice despite requests from Microsoft that they stop.

"We support the efforts of Microsoft to crack down on software piracy and counterfeiting," said Gerald Riddle, vice president of Data Management Systems Inc., Clearwater. "Piracy creates an uneven playing field that undermines the ability of honest resellers to compete. I don't blame consumers for being attracted to 'good deals,' but ultimately it's honest businesses and consumers that suffer when counterfeit software is acquired."

The lawsuits announced today allege that despite receiving cease-and-desist letters from Microsoft asking them to stop the distribution of counterfeit software, all the defendants continued distributing counterfeit and/or infringing copies of Microsoft software to customers and/or investigators.

The lawsuits, filed in the U.S. District Court for the Middle District of Florida, make the following charges:

• Computers Etc. of Clearwater allegedly distributed counterfeit components of Windows® 95 and Office Pro 97 (Case No. 8:00-CV-2001-T-17A).
• Dacanay Consulting of Orlando allegedly distributed counterfeit components of Office Pro 97, Office 2000 and Windows 98 (Case No. 6:00-CV-1283-ORL-28A).
• Eva Computer Service of Clearwater allegedly distributed counterfeit components of Office Pro 97 and Windows 95 (Case No. 8:00-CV-2000-T-17F).

"As a leader in the software industry, Microsoft is committed to protecting consumers from illegal software offerings," said Nick Psyhogeos, corporate attorney for Microsoft. " We take this responsibility seriously, because piracy not only harms consumers, but also has a grave impact on state and local economies.

"In addition to continuing legal action against those who persistently distribute counterfeit software," said Psyhogeos, "Microsoft remains focused on educating consumers about the risks of counterfeit software, as well as implementing innovative anti-counterfeiting features in our products so that consumers can better distinguish genuine product from counterfeit."

Anti-piracy efforts in Florida and the South have stepped up in recent months. A few weeks ago the Business Software Alliance (BSA) held a truce in Tampa during which customers, including small businesses, were encouraged to review their software and ensure its compliance.

In August, Microsoft joined the U.S. Customs Service to announce criminal actions taken against two Georgia-based businesses for the alleged distribution of counterfeit Microsoft software valued at nearly $1 million. Both companies are subject to criminal penalties for trafficking in counterfeit goods.

Software piracy has a severe negative impact on state and local economies across the country. According to a study by International Planning and Research (IPR), the piracy rate in the state of Florida is 30.7 percent, higher than the national average of 25 percent. The IPR study also reports that software piracy cost Florida more than $347 million in combined revenue, wage and tax losses in 1999, ultimately stealing away resources that could otherwise contribute to local and state improvement projects.

Consumers are urged to consider the warning signs of counterfeit software and exercise cautious shopping practices to help ensure that the software they acquire is genuine. Warning signs of counterfeit software include the following:

• 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

Piracy on the Internet has become a serious problem due to the explosive growth of the medium, its efficient worldwide reach, and the low risk of detection for purveyors of pirated products.

Additional tips to help consumers shop smartly and safely online include the following:

• Beware of online businesses that are unwilling to verify their full business name or provide a physical street address and telephone number for a follow-up after the transaction has occurred.
• Avoid online distributors that are unable to provide adequate descriptions of their return service or warranty policies.
• Be cautious of online distributors that offer unusual inventory explanations such as special deals with the software publisher, liquidated inventories or acquisition through bankruptcy sales.

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. Additional information on piracy is available at Microsoft's anti-piracy Web site at http://www.microsoft.com/piracy/ . Consumers can also obtain

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.

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