Microsoft Fights Software Component Piracy

Microsoft Corp. is telling consumers how to detect counterfeit software illegally obtained through its Microsoft Easy Fulfillment program and also is warning distributors that software piracy will not be tolerated.

Microsoft has issued a statement regarding abuses of the "easy fulfillment" program, which have led Microsoft to file a lawsuit against two companies that allegedly distributed software illegally. Misuse of the program is "widespread," said Claire O'Donnell, a paralegal in Microsoft's legal and corporate affairs department, in an interview today.

Customers who buy volume-licensing agreements for specific Microsoft software may also acquire supplemental components for the software under the fulfillment program. The components are shipped as CD-ROMs in plastic cases without an end-user license agreement, user's manual, registration card, warranty or other features included when items are purchased through the retail channel.

Some distributors without licensing agreements are ordering software components and illegally selling them into the retail channel as if they were legitimate retail products, according to Microsoft. O'Donnell said that the fulfillment program has hundreds of members, though a specific figure was not available.

"We're trying to get a handle on it now before it gets out of hand," O'Donnell said of the piracy, adding that "it's a huge number" of distributors who are misusing the program.

The software giant in January filed a lawsuit against Zebra Distribution Inc. of Annapolis, Maryland, and also named a retail outlet, Computer and Communications Systems Inc., or Computer Etc., of Potomac, Maryland. The suit alleges that, through the fulfillment program, the two obtained CD-ROMs containing Microsoft Office 97 Professional Edition, the Windows NT Server Academic version and Windows NT Server 4.0 operating system. Zebra was not a legitimate distributor in the program, but allegedly had obtained a licensing identification number through fraudulent means.

Microsoft also is suggesting that consumers watch for warning signs that software is counterfeit or being illegally sold. If prices seem too good to be true, the software probably is counterfeit, the company said. If software is sold without an authenticity certificate, end-user license agreement, registration card or backup disks, manuals or other materials for installation on a new computer system, it probably is not a legitimate product.

Backup disks with handwritten labels and manuals that are photocopied also are giveaways -- both backup disks and manuals should be shrink-wrapped. The company also said that disks and manuals of inferior quality are another warning sign.

Microsoft is tracking tips received at its anti-piracy hotline, and based on information coming in there, other lawsuits related to abuse of the fulfillment program are likely.

"There are two or three more coming down the road," O'Donnell said. "As fast as we're getting these tips, we'll be filing future cases."

Microsoft is citing a lawsuit brought in 1993 by Novell Inc. against Weird Stuff Inc. in its Maryland lawsuit. Weird Stuff, a California company, was found to have resold Novell system disks that Novell's manufacturer threw in a dumpster because the products did not meet the company's quality-control standards, according to the Microsoft statement. The court in that case ruled in favor of Novell that the disks were not complete or intended to be sold or marketed as stand-alone products.

The same lawsuit was used as a precedent when Microsoft successfully sought a prohibition on the distribution of fulfillment supplemental CD-ROMs by L&M Manufacturing Corp. in Miami.

Microsoft, in Redmond, Washington, can be reached at +1-425-882-8080 or http://www.microsoft.com/.

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