Microsoft sues Ontario VARs over alleged piracy

Microsoft Corp. has launched lawsuits in the Federal Court of Canada against seven Ontario system builders that have allegedly been hard disk loading unlicensed copies of its software onto PCs and selling them without certificates of authenticity and other components of the company’s software.

According to court documents obtained by Computer Dealer News, the resellers identified in the lawsuits include Toronto-based 3P Computer and Network (Canada) Ltd., Computer Liquidation Outlet, ITPC Computers and Compufix Systems, 1515305 Ontario Ltd. in Mississauga, Peel Office Machines Canada Inc. in Brampton and Morcor Computers 2000 Ltd. in St. Catharines.

The programs allegedly installed include Microsoft Windows XP Professional and versions of Microsoft Office, including Microsoft Office Professional 2003, Microsoft Office XP Professional with FrontPage and Office 2000 Premium.

In each of the seven cases, the system builders are charged with copyright infringement and face statutory damages of up to $160,000.

According to Microsoft Canada’s license compliance manager, Susan Harper, cease and desist letters were sent in the spring to each of the parties in question, notifying them of the consequences of hard disk loading and asking each to stop the illegal activity.

After failing to meet the terms of the notice, Harper said, Microsoft took legal action.

“We give them a chance, a few weeks to start selling legal. We go back in, if they have not changed, that’s when litigation starts,” said Harper.

While a good deal of Microsoft’s leads come through the company’s anti-piracy hotline, 1-800-RU-LEGIT, Harper added that private investigators are also used to visit suspicious resellers and system builders in certain cities to confirm if the business is selling illegitimate software.

“Between the seven charges here, it would have been a combination of either a partner or end customer calling into the hotline or it could also be a result of investigator walk-in,” she said.

The latest round up of resellers adds to Microsoft’s growing list of infringement lawsuits. In March the company filed civil lawsuits against five Montreal-area system builders for hard disk loading.

Harper said, the strategy has not changed. “We’ve constantly been doing this (taking legal action), it’s nothing new,” she said, “The strategy continues to be education. I’ll educate the system builders to understand what needs to be done, but it’s the end customers that are having the bad experience and I want them to understand what to look out for.” She added that getting the anti-piracy message out means positive PR by Microsoft as well as partner and user education of intellectual property. Though Microsoft is not being any more aggressive than in previous years to catch renegade resellers, Harper said, the company is making greater efforts to address the issue of piracy through public awareness. In addition, partners are playing a role in reporting shady channel business.

“There are legitimate partners trying to make a living, trying to sell in a tight market and when people are selling illegal product, it brings the whole partner community down because it’s hard for them to compete with legal product when others are selling illegal product,” she said.

Harper added that Microsoft will continue to invest in areas to protect partners and customers from illegal software vendors and resellers.

“There’s other software partners that need us to help them with this because they are small software developers that are trying to build their unique code and they’re getting ripped off,” she said. “They don’t have the legal impact to do what we’re doing, so it’s not just on behalf of Microsoft, it’s helping all the other software vendors as well.”

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