Microsoft Helps Protect Consumers by Tackling Illegal Software Sales
Posted on May 6, 2008
Filed Under Microsoft, Software
REDMOND, Wash., May 6 /PRNewswire-FirstCall/ — As part of its ongoing
commitment to protect customers and partners, Microsoft Corp. today
announced legal actions against eight software dealers in the United
States, Canada, Egypt and the Netherlands that are alleged to have engaged
in the illegal sale of unlicensed Microsoft software and software
components. These actions were in response to hundreds of reports to the
Microsoft anti-piracy hotline (800) RU-LEGIT (785-3448) from customers who
were concerned they had been sold software they were not licensed to use.
Microsoft’s actions also are in response to concerns expressed by
legitimate software vendors that they are being compelled to compete with
dealers of unlicensed software who undercut their prices. “We appreciate
Microsoft’s actions today. It is important to address this kind of illegal
sale to level the playing field for legitimate distribution partners,” said
Micheal LoPatriello, chief executive officer of Luna Development, a
Microsoft industry partner based in Ontario, Canada.
The alleged illegal sales involved the unlawful importation of
unlicensed software into North America from multiple dealers overseas. As
alleged in the lawsuits, the dealers deceived customers by selling them
software without also providing them with the necessary licenses. This
software includes Student Media that is licensed for use only by students
under special academic agreements between Microsoft, schools and
governments. It also includes Volume License Media that is licensed for use
by businesses under licensing agreements with Microsoft. In addition to the
unlicensed software, some of the alleged dealers sold customers illegal
Certificate of Authenticity (COA) labels that were improperly separated
from their original software package.
“We want customers to receive the best possible experience with our
products, including the benefits of support and service that come with the
purchase of licensed, genuine software,” said Bonnie MacNaughton, senior
attorney at Microsoft. “The legal actions announced today are part of our
ongoing commitment to protect consumers and support our partners by
preventing dishonest dealers from selling unlicensed software. The unlawful
distribution and sale of this software has tangible, negative consequences
for the marketplace. It undermines Microsoft’s legitimate partners and
deceives customers who think they are receiving the full value of what they
paid for, but instead unknowingly receive unlicensed software.”
A software product license grants customers the legal right to run or
access a software program. Microsoft Volume Licensing programs offer
businesses a convenient way to acquire and manage multiple software
licenses. In the cases announced today, dishonest dealers were diverting
software intended to be provided under a volume license or through a
special academic agreement, and instead sold the software as though it were
a fully licensed retail product — generally through an online auction or a
Web site. The dealers also provided unauthorized product keys with the
diverted software to enable it to be installed and activated. In two of the
cases announced today, test purchases identified dishonest dealers who also
were trafficking in COA labels. These labels are intended to help customers
verify whether they have genuine Microsoft software and should never be
sold or purchased separately from their original software package.
Stopping the Problem at the Source
Microsoft also is working to identify and remove the source of illegal,
unlicensed software and has taken action in one of its lawsuits against an
alleged source for unlicensed software in the Netherlands. Microsoft
investigators were alerted to this source by a number of software dealers
in the U.S. who settled prior lawsuits for selling unlicensed software.
Microsoft has alleged that HW Trading BV and its principal, Samir Abdalla,
received more than $3.7 million from just three dealers in the U.S. between
March 2006 and May 2007 in payment, in whole or in part, for unlicensed
software. These substantial profits were possible only because HW Trading
and Abdalla did not purchase and transfer the necessary licenses for the
software and, as a result, paid only pennies on the dollar for the software
media.
On April 30, 2008, a second source of unlicensed software was raided by
Egyptian law enforcement authorities, and computers loaded with unlicensed
software, counterfeit software and software components, and various other
unlicensed software products were confiscated. This source is alleged to be
exploiting the Egyptian government’s PC Initiative — a program that
provides low cost software to the Egyptian people in order to provide them
with access to technology. Instead of supplying the software to the
Egyptian people for whom it was intended, the dealer allegedly supplied
them with counterfeit software and exported the real software to the U.S.
The software was then paired with unauthorized product keys and allegedly
sold to unsuspecting U.S. customers without the necessary licenses.
A Disturbing Trend
Microsoft and the software industry have witnessed an increase in the
illegal sale of unlicensed software and software components. As far back as
2003, about 36 percent of the software installed on PCs globally was
unlicensed, costing the global economy $28.8 billion. Between 2003 and
2006, that loss has risen by $10.6 billion, while the global software
piracy rate has dropped only one point to 35 percent - this according to
the May 2007 Business Software Alliance annual Global Software Piracy
Study. By addressing this illegal activity, Microsoft is helping to level
the playing field for legitimate dealers who are harmed when illegal sales
cut into their business, and ensuring that consumers receive the full value
of licensed, genuine Microsoft products.
Reporting Suspected Piracy
Today’s cases are part of Microsoft’s ongoing efforts to protect its
customers and partners from all types of piracy. Microsoft customers and
partners can play an important role in thwarting piracy by reporting tips
to the Microsoft anti-piracy hotline at (800) RU-LEGIT (785-3448).
Microsoft encourages anyone who receives software that is suspicious to
call the hotline. More information about genuine Microsoft products,
licensing and labels is available at http://www.howtotell.com.
About Microsoft
Founded in 1975, Microsoft (Nasdaq: MSFT) is the worldwide leader in
software, services and solutions that help people and businesses realize
their full potential.
Leakage and Fraud Campaign
Case Summaries Filed in the United States District Court for the Northern District of
Ohio
Microsoft Corp. v. 9187-4024 Quebec Inc., d/b/a Buy Zone Direct,
Buyzonedirect, Easybuysoft, and Futur-Soft; and John Does 1-5 (Cleveland,
Ohio), alleging importation and distribution of infringing Windows XP
Professional x64 Edition and Office 2003 Standard, and distribution of
standalone Certificate of Authenticity Labels.
Case No. 1:08-cv-1086
Filed in the United States District Court for the Southern District of
Florida
Microsoft Corp. v. CietDirect.com LLC, d/b/a CietDirect.com; ADM
Managing, Inc.; Aaron Markizer; and John Does 1-5 (Davie, Florida),
alleging importation and distribution of infringing Windows XP Professional
x64 Edition.
Case No. 08-cv-60668-Ungaro-Simonton
Filed in the United States District Court for the Northern District of
California
Microsoft Corp. v. A&S Electronics, Inc., d/b/a TrustPrice.com; Alan Z.
Lin; and John Does 1-5 (Milpitas, California), alleging importation and
distribution of infringing Windows XP Professional x64 Edition, Windows 98,
and unauthorized Product Keys.
Case No. C08 02321 BZ
Filed in the United States District Court for the Central District of
California
Microsoft Corp. v. Tinh Nguyen, d/b/a PTKTCOMP and tptcomputer.com; and
John Does 1-5 (Anaheim, California), alleging distribution of infringing
Windows XP Professional x64 Edition, and Windows Server 2003 Standard x64
Edition software, and the illegal distribution of Product Key labels and
counterfeit Volume License Keys.
Case No. SACV08- 499 DOC (RNBx)
Filed in the United States District Court for the Central District of
California
Microsoft Corp. v. Hoa Thao Vu Tran, a/k/a Hoat Tran, d/b/a CDX
Software, CDXSoftware.com, HTTFISH, and HTTFISH42; and John Does 1-5
(Garden Grove, California), alleging distribution of infringing Windows
Small Business Server 2003 Premium, Windows XP Professional x64 Edition, a
counterfeit Volume License Key, and standalone Certificate of Authenticity
Labels.
Case No. SACV08- 498 DOC (ANx)
Filed in the United States District Court for the Eastern District of
Virginia
Microsoft Corp. v. Pronet Cyber Technologies, Inc., d/b/a Pronetcd.com
and USSoftware.com; Joseph Teshome; and John Does 1-5 (Alexandria,
Virginia), alleging importation and distribution of infringing Windows XP
Pro x64 Edition and Windows XP Home, counterfeit Windows Server 2003,
unauthorized Product Keys, and counterfeit and illicit Product Key Labels
and Certificate of Authenticity Labels.
Case No. 1:08-cv-434-TSE/TCB
Filed in the United States District Court for the Central District of
California
Microsoft Corp. v. Samir Abdalla; H.W. Trading, B.V., and John Does 1-5
(Los Angeles, California), alleging importation and distribution of
infringing Office 2003 Professional, Office 2003 Standard, and Windows XP
Professional.
Case No. CV08- 2929 DSF (JCx)
SOURCE Microsoft Corp.
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