Microsoft points finger at 21 Toronto VARs in piracy sweep

Microsoft Canada has prosecuted six Toronto-area resellers as part of anti-piracy sweep that has identified a total of 21 channel partners as allegedly distributing unlicensed software.

Three of the lawsuits have already been settled. The lawsuits, which were filed in the Federal Court of Canada, claim statutory damages totalling $20,000 per work infringed. Central Tech Computers, Computer Plus Systems and Union Computers and Electronics were among the VARs who settled.

Microsoft conducts anti-piracy sweeps three to five times a year in Canada based on tips from the [email protected] e-mail account or the 1-800-R-U-LEGIT telephone line. Investigators from Microsoft then approach the suspected resellers under cover and requested unlicensed versions of Microsoft software. If the reseller complies — a process called “hard disk loading” — Microsoft sends the company a cease-and-desist letter. Microsoft’s investigators then check back in a few months and if the same thing happens, the company prosecutes.

Michael Eisen, director of laws and corporate affairs for Microsoft Canada, said the most recent sweep was based on approximately 80 tips. The company was able to settle with 14 of the 20 resellers who allegedly hard disk-loaded PCs for its investigators, then prosecuted the remaining six.

Sometimes, Eisen said, software pirates will go to great lengths before they settle with the company.

“They believe the letter contains a hollow threat, that it’s just a form letter and no one’s going to do anything about it,” he said. “I think there are always, unfortunately, people that are trying to make a quick buck and don’t care whether they break the law.”

According to recent numbers released by the Canadian Alliance Against Software Theft (CAAST), Canada’s overall software piracy last year rate dropped three per cent, the first drop since 1997. Eisen said the work of CAAST and others to raise awareness has had a considerable impact on the attitudes of many potential pirates in the channel. Many VARs tell investigators they have either gotten a letter from Microsoft already or have read about its anit-piracy campaign and refuse to distribute unlicensed products. To others, he said, the warnings fall on deaf ears.

“Anyone who claims they didn’t appreciate that they were doing something wrong is not very believable,” he said. “We’ve been out there many times, our activities have received media coverage, journalists have made it crystal clear the things you should and shouldn’t do in any of their stories.”

Eisen said he is hopeful Microsoft can settle the remaining three lawsuits without taking resellers to trial. The company performs similar sweeps in Vancouver, Montreal, Calgary and Edmonton.

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Jim Love, Chief Content Officer, IT World Canada

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