Microsoft Files 20 Lawsuits to Counter Piracy

The suits, which were filed in nine states, target resellers that the company claims sold illegal versions of Windows and Office.

Microsoft is clamping down on software piracy, announcing Sept. 19 that it is filing federal lawsuits against 20 resellers of Windows XP and Office versions that the company claims are illegal.

In a statement, the Redmond, Wash., software giant called the lawsuits part of a "broader company initiative to combat counterfeiting and other forms of software piracy."

In the lawsuits, Microsoft claims that these 20 resellers either distributed counterfeit software or software components. The company also accuses some of the resellers of hard-disk loading—the practice of installing pirated software onto desktops and notebooks and then selling these computers to businesses and users.

Microsoft and the rest of the software industry have tried in recent years to clamp down on pirated software. On March 15, Microsoft filed lawsuits against several U.S. residents and a company for using eBay to sell counterfeit software.

/zimages/3/28571.gifClick here to read more about how Microsoft has switched its business practices to combat piracy.

In a written statement, Mary Jo Schrade, a Microsoft attorney, wrote, "Microsoft is determined to protect its intellectual property, while also helping protect consumers and honest resellers from the deceptive and dangerous practices of counterfeiting and hard-disk loading."

The company claims that most of the pirated software involved different versions of Microsoft Windows XP or Microsoft Office.

In addition to the lawsuits, Microsoft announced the results of its own forensic analysis of counterfeit software in 17 countries. The company claims its audit of 348 counterfeit disks found that 34 percent could not be installed on a PC.

/zimages/3/28571.gifClick here to read more about how piracy affects the software industry and consumers.

The company also found that the pirated disks had security risks due to tampered code that could lead to denial-of-service attacks, bypass of password protection and application memory corruption for users.

The lawsuits were filed in federal courts in Connecticut, Florida, Georgia, Kansas, New Jersey, New York, Ohio, Oregon and Texas.

Joe Wilcox, a Washington-based analyst for JupiterResearch, said that Microsofts strategy of targeting resellers who traffic in pirated software will continue and accelerate as the company looks to protect its property and its bottom line.

"In the U.S., Microsofts growth is slowing," Wilcox said. "The market is already saturated with products, and any money lost is a great concern."

There is also concern by Microsoft about security and what the company, and its customers, will have to spend for security patches, especially if PCs are being loaded with pirated software that contain code that has been tampered with and then sold, Wilcox said.

"There are potential hidden costs for everyone, whether it is security or the cost of tech support and infrastructure," Wilcox said.

Editors Note: This story was updated to include comments from JupiterResearchs Wilcox.

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