Microsoft Files Piracy Suits

Microsoft has filed lawsuits against eight software re-sellers, saying that consumers helped lead them to the firms accused of selling pirated versions of the company’s software.

Microsoft said it sued eight companies located in Arizona, California, Illinois, Minnesota and New York, with the information used in the suits gathered during investigations sparked by calls to its anti-piracy hotline.

Serious Business

The software giant said the firms sold counterfeit or unauthorized copies of Microsoft Windows and related software components and that it made attempts to resolve the disputes before filing the actions.

“Microsoft does not take legal action lightly,” senior attorney Mary Jo Schrade said in a statement. “We remain very serious about protecting honest software resellers and consumers from the illegal activities of software counterfeiters.”

Two of the suits came about after the target companies allegedly violated earlier agreements with Microsoft.

Microsoft has long taken a hard-line stance against piracy, as has the software industry in general.

The Business Software Alliance (BSA) has undertaken extensive public education efforts aimed at getting consumers to report suspected piracy. An independent study by IDC commissioned by the BSA found that 35 percent of software worldwide is unlicensed, representing some $33 billion in lost revenues for software publishers.

Pirates of the Strip Mall

Microsoft sued the following companies: BWT Industry Technology Service Inc., which does business as Computer Max Co. of Sierra Vista, Ariz.; Data Day USA, Inc., of Vallejo, Calif.; MicroCity4Less.com of Torrance, Calif., which operates under a number of names; Winvtech Solutions, Inc., of South El Monte, Calif.; Ion Technologies of Minneapolis, Minn.; Compustar Co. of Brooklyn, N.Y.; and Chips & Techs of New York, N.Y.

Most of the suits deal with alleged piracy of Windows XP, though some include other programs, including Office XP and SQL Server software.

Microsoft said such pirated software hurts consumers by putting sub-standard product into the market, and hurts legitimate re-sellers by making it difficult for buyers to distinguish between legitimate and illicit software.

The suits come after Microsoft’s controversial Windows Genuine Advantage (WGA) program launched. That effort offers Windows users who want to get downloadable updates a suite of upgrades to their software, if they first submit to a screening to determine if their software is legitimate.

Many analysts believe that program will not dent serious software piracy, though it may help lead Microsoft to some pirates who sold illicit product to unwitting buyers.

“The bigger groups, the ones that are pirating the most software worldwide, the ones really eating into revenue — they aren’t affected [by the screening],” said Yankee Group analyst Michael Goodman.

Global Problem

Microsoft has said that its efforts would eventually lead to real software pirates and the batch of lawsuits seem to be an attempt to prove that WGA has value for stopping piracy.

On a global level, the problem of software piracy is seen as potentially undermining growth in key emerging markets. The IDC study conducted earlier this year found that as much as 90 percent of the software used in China is counterfeit, a rate outpaced by Vietnam, at 92 percent and 91 percent in the Eastern European country of Ukraine.

Joel Ronning, the CEO of e-commerce provider Digital River, which helps software publishers sell their wares online, said a technological solution to software piracy may lie in the form of next-generation digital rights management.

“Piracy is a huge concern for every software publisher,” Ronning told the E-Commerce Times. “Especially with markets expanding into developing countries and economies, companies want to protect their property to the greatest extent possible.”

1 Comment

  • The real issue that organizations need to face up to is that it doesn’t really matter how much the software behemoths lose, the real losers are the business and end-user organizations themselves in all the wasted time and effort their employees are engaging in when it comes to downloading software pirated copies, hacks, serial numbers, cracks, sound files, movie files and fonts.
    All of these are prone to cause mega problems on an organizations systems and yet no one is focusing on the lack of ROI being generated by stupid behavior by employees and managers behaving badly.
    By all means have a go at the reseller market and square away box delivered software that is done "under the counter" but when the focus turns to the C level execs who fail to budget, who sanction piracy/copying etc in the organization then the $ lost is many times over the industry figures being spoken of.
    The real issue for Gates and Balmer is that they are NOT engaging the C level management in the manner they need to get them as allies in the game of countering the issues faced. Every time Gates and Balmer come up with a means to counter piracy by techno means the techno underworld finds a work around and they haven’t failed yet.
    Using technology solutions to solve what is a people based problem is NOT the answer. You need a sea change in attitude to overcome piracy in the workplace and the techno means on offer or being mooted just don’t cut the rug. Why? The attitude issues that people have to the fact that software is "soft" and therefore it’s free so here’s your copy! It happens every day in every office all over the place and the number of burnt CDs/DVDs of music / movies done in business premises these days is very significant and management are not paying attention!
    My tip is the movie and entertainment industry will become even more aggressive than the Microsoft’s of the world when it comes to piracy clampdowns as they have mega millions to lose at the box office and DVD sales etc due to existing sloppy behavior and work practices in place on most sites.
    Think it doesn’t happen? Think again. When did you last not hear about "hey I’ve got a copy of xyz, would you like one too?" It’s happening everywhere!
    Using technology solutions to solve what is a people based problem is NOT the answer.
    You need a seachange in attitude, which focuses directly on business basics and gets the business back on track to its real core activities and not wasting time and productivity!
    Failing to do so places you at risk and its only a matter of time when sites IP addresses and Open Ports will be used to trace back into organizations street addresses and CEOs/directors/stakeholders.
    There are tried and proven tactics that are used to conduct a raid using an Anton Pillar order and when this happens and these organizational sites are proven to have been lax enough to allow bad practices such as copying using corporate assets they are likely to be dragged through the courts for aiding and abetting the whole issue of piracy right across the board! The penalties for this by organization and by individual are very significant sums and yet they don’t reflect the true cost of the whole affair that can be 4 to 5 times the published values when you add up all the costs!
    Using technology solutions to solve what is a people based problem is NOT the answer.
    Organizations need a seachange in attitude that starts at the very top and needs to be cascaded right down, through and across, making everyone accountable! It’s really very simple when you understand the basics, particularly when you start focusing on why you are really in business!

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