20 U.S. Resellers Sued in Microsoft Piracy Crackdown

Microsoft filed federal lawsuits against 20 companies allegedly distributing "counterfeit or infringing" software.

Microsoft this week cracked down on U.S. resellers distributing pirated software by simultaneously filing federal lawsuits against 20 companies that the software giant alleged were distributing "counterfeit or infringing" software.

Microsoft positioned the filings as being "part of Microsoft Corp.'s commitment to honest and legitimate resellers in the channel." The company stated in a news release that it is "working to take the economic advantage out of dealing in pirated software."

All of the lawsuits were filed on Tuesday and announced on Wednesday. The lawsuits came in 13 states, including four in Alabama, three in Texas and two each in Georgia and New York.

Of the 20 cases, 17 involved tips to Microsoft's anti-piracy hotline, 1-800-R-U-LEGIT. Following the hotline tip or other information, Microsoft put a "secret shopper" into action to investigate the case. Secret shoppers are Microsoft employees who buy products from suspected distributors of pirated software to build a case against those firms. In each lawsuit, Microsoft claims to have sent a warning letter or a Cease-and-Desist letter to the reseller before filing suit.

Microsoft officials say that the letters often prompt resellers to stop distributing pirated software -- either out of fear of further prosecution or because they themselves had been fooled into passing along high-quality counterfeit goods.

Nearly all of the cases involved alleged distribution of infringing or counterfeit versions of Windows XP Professional and/or Microsoft Office 2003, with one case also including Office XP Professional and another case including Office 2007 Professional. A separate case involved alleged counterfeit versions of SQL Server 2000.

Resellers sued by Microsoft on Tuesday were F.A.R. Inc. (Birmingham, Ala.), Computer America LLC (Birmingham, Ala.), Net's Computers Inc. (Birmingham, Ala.), Bisdex Inc. (Tuscaloosa, Ala.), Ben's Hobby Computers (Zebulon, Ga.), Ram Computers Inc. (Riverdale, Ga.), Cyber Cycle Inc. (Chicago), TNT Auto Glass and Computer Repair (West Point, Miss.), Puterology (Falconer, N.Y.), AllPro Computer and Gaming (Tulsa, Okla.), Inc. (Stafford, Texas), The Computer Clinic (Katy, Texas), TomTech Computers (Houston), CPS Computer (Cinnaminson, N.J.), Computer & Parts Unlimited Inc. (Staten Island, N.Y.), My Computer Dealer Inc. (St. George, Utah), PC Trade (Lake Forest, Calif.), Best Price Computers LLC (Defiance, Ohio), ABC Rentals & Computers (South Boston, Va.), and The Computer Guy LLC (Bridgeport, Conn.).

The U.S. reseller arrests come after Microsoft cooperated with the U.S. Federal Bureau of Investigation and Chinese authorities in July to break up a massive software piracy ring believed to have been responsible for manufacturing and distributing more than $2 billion worth of Microsoft software.

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.


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