MSFT: Microsoft Aims to Protect Holiday Shoppers, Retailers From Technology Pirates

With its potential payload of viruses, worms, spyware and other hazards, counterfeit software can quickly turn a high-tech holiday stocking stuffer into a smoldering lump of coal. Microsoft Corp. today filed copyright infringement lawsuits against alleged dealers of counterfeit versions of the company’s programs, sending a shot across the bow at pirates scheming to defraud consumers and the vast majority of legitimate businesses out of earned profits during the holiday season.

The lawsuits Microsoft announced today are against those companies that allegedly distributed counterfeit and pirated software and software components or participated in hard-disk loading (installing unlicensed software on computers they sold). The suits were filed in 25 cities across the U.S., from Riverbank, Calif., to Melbourne, Fla. The vast majority of software distributors are honest businesses that lose out to the dishonest dealers that attempt to defraud consumers.

“No one would want their newly purchased computer or software to be laden with problems caused by incomplete code, worms, viruses, spyware and other risks,” said Mary Jo Schrade, senior attorney at Microsoft. “Aside from a fight to protect our intellectual property, we are working to protect our partners and customers who buy computer software in good faith, expecting to get genuine Microsoft® Windows® and end up being exploited and defrauded by software pirates.”

To bypass installation and licensing protections in today’s software, counterfeiters must physically alter the software’s code. Essential elements of the program are often deleted, while unnecessary extras can be inserted. Deleted code will cause the software to behave erratically — displaying error messages or failing to work with other software and devices — and the extra code inserted by counterfeiters may include malware or spyware that can be used to infect a PC with viruses, change settings or even track how someone uses the computer, such as tracking Web sites visited or keystrokes entered. This malicious software can be used to steal personal information such as usernames, passwords and credit card numbers.

“No consumer has the ability to examine the code that a counterfeiter has offered for sale, so there’s no way to tell how it’s been altered until it’s too late,” said Laura Didio, Yankee Group analyst. “With so much reliance on the Internet and PCs for shopping and banking and communications today, the stakes are just too high to justify saving a few dollars buying counterfeit software.”

Microsoft software is an integral part of the company’s Genuine Software Initiative. The initiative focuses the company’s multiple activities and investments directed at fighting software counterfeiting and other forms of software piracy into a single initiative with increased investments across three strategic areas: education, engineering and enforcement. Within each area, Microsoft is investing in activities that educate and help protect consumers and business partners from counterfeit software and other forms of software piracy.

In addition to helping protect consumers, Microsoft also enforces its copyrights on behalf of the legitimate resellers that make their living selling genuine Microsoft software and services. The company partners with businesses of all sizes that are vital contributors to the local communities in which they are located. Often these honest companies lose business to companies offering pirated software at cheaper prices.

“Today’s announcement is part of an ongoing, programmatic effort by Microsoft to level the playing field for our partners,” said John Ball, general manager for U.S. Local OEM Business at Microsoft, which works with businesses that manufacture computers. “Ultimately, our goal is straightforward: To make sure that fair business practices prevail and that consumers get what they pay for and what they deserve when they purchase Microsoft software.”

Microsoft gathered evidence for these cases through its test purchase program: The company purchases hardware and software from computer dealers across the country in the same way that consumers and businesses do. Microsoft then tests the software and software components to determine their authenticity. Microsoft notified defendants of the illegal activity and provided them with information for acquiring and distributing legal, genuine software.

Complaints were also received about some of the defendants through the company’s anti-piracy hot line, (800) RU-LEGIT (785-3448).