Tipsters Help Microsoft Nab Overseas Thieves

Microsoft  filed nine lawsuits and issued more than
50 cease-and-desist letters today against international smugglers accused of
diverting discounted copies of its software into the United States.

Microsoft said it learned about the scheme from tipsters who alerted the
company using its anti-piracy hotline.

According to the complaints, which were filed in federal courts in six
different states, companies in Jordan and elsewhere posing as academic
resellers made millions of dollars in illegal profits by trafficking
specially priced academic software diverted from education programs.

The pirates allegedly obtained hundreds of thousands of copies of discounted
Microsoft Windows and Office system software under false pretenses and then
sold them to Internet retailers in the U.S., instead of to the students for
which they were intended. The software was then sold to U.S. consumers at
retail prices, generating hefty profits for the Middle Eastern and
U.S.-based pirates.

The software had been heavily discounted by Microsoft as part of its policy
of providing lower-cost versions of its software to schools in developing

Bonnie MacNaughton, a senior attorney at Microsoft, said the
alleged pirates sold clearly marked educational software to unsuspecting
retail customers who were not licensed to use it while “potentially
depriving students and schools of the opportunity to benefit from the latest

Lawsuits were filed in California, New York, New Jersey, Florida, Nevada and
Montana., which Microsoft said was one of the
largest offenders, has already agreed to settle out of court for more than
$1 million in cash and property.

Other merchants that received cease-and-desist letters have agreed to voluntarily stop selling the software, which
is marked “Student Media” and “Not for retail or OEM distribution. Not for

Microsoft’s anti-piracy hotline number in the U.S. is (800) 785-3448.

The company has been aggressive in fighting overseas piracy and
counterfeiting, both on its own account and through proxies, such as the Business Software Alliance,
which recently
brought suit against several European software pirates.

However, overseas piracy has not prevented the company from aggressively pursuing overseas sales.

It is in the process of either testing or implementing numerous programs
aimed at putting its software in the hands of businesses and consumers in
developing economies.

Microsoft has also courted foreign governments that might be wary of entrusting their IT infrastructures to a U.S.-based vendor of proprietary software.

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