| ISMagazine.com | Crime and Justice |
October, 1999 |
Microsoft Battles
Latest Trend in Software Fraud - Distribution of Counterfeit Software Licenses
Company Files Lawsuits Across Country to Help Prevent Governments, Businesses and Consumers From Acquiring Fakes
REDMOND, Wash., July 21 -- Microsoft Corp. today announced that the company has filed lawsuits against computer retail businesses in four states in the first major crackdown by Microsoft on the illegal distribution of counterfeit Microsoft(R) software licenses. Although counterfeiting software requires expensive equipment and technical knowledge, counterfeiting licenses is an easy, inexpensive process. Counterfeiters can duplicate the agreement with a photocopy machine or a computer and trick unwitting customers into purchasing the worthless licenses.
Government agencies have been among the most susceptible to this growing trend of counterfeiting because of their established guidelines to purchase from the lowest bidder. In the past year, Microsoft has identified more than 40 federal, state and local government agencies across the United States that have purchased more than 1,200 counterfeit software licenses.
"Counterfeiters are realizing that the true value of software is in the license, and that they can easily replicate licenses and pose as legitimate distributors," said Tim Cranton, corporate attorney at Microsoft. "It is also increasingly easy for customers to be fooled into thinking they are purchasing the real thing, because many counterfeit license manufacturers are able to advertise their worthless licenses over the Internet and sell them sight unseen. We have worked closely with government agencies during the past year to help prevent them from acquiring counterfeit licenses, but due to the upsurge in this disturbing trend we feel that we must share the warning more proactively with all consumers."
When acquiring a program, consumers are buying the right to use the software in accordance with the license, or End User License Agreement (EULA), that comes with the software. To run the program on more computers than the license agreement allows, consumers must purchase the right to do so through additional software licenses. Genuine Microsoft software licenses are either distributed in packaged Microsoft License Paks or included in packaged retail software along with CD-ROM, user's manual, Certificate of Authenticity, and other components that make up a complete software package. Customers should be suspicious of software licenses on a stand-alone basis, such as an unpackaged piece of paper, or in bulk without product packaging. If purchasing through Microsoft's online licensing program, organizations should receive an authorization code and license number that can be used to confirm licenses on a Microsoft Web site.
Microsoft generally initiates investigations as a result of tips to the
Microsoft anti-piracy hot line, most of which are received from resellers or consumers who receive suspicious software or materials. In this latest action by Microsoft, companies across the United States were investigated, and businesses in California, Colorado, Texas and Utah were charged with distributing counterfeit Microsoft EULAs to investigators. Four of these businesses operate Internet sites; five of the complaints also allege that, in addition to EULAs, the defendants distributed counterfeit software to investigators or customers.