Microsoft's soft/hard push on illegal products

Microsoft's soft/hard push on illegal products

Microsoft is stepping up its efforts to counter illegal trade in its products through a two- pronged approach - a soft one and a very hard one.

The soft side will see the company launch a branding program aimed at PC manufacturers and assemblers across Australia within the next few weeks. The initiative, the 1997 OEM Partner Program, is free. It will provide regular communications, promotions and discounts.

On the hard side, Microsoft is continuing to ruthlessly pursue legal remedies against organisations and individuals alleged to be involved in the illegal distribution of its products. In this it is working closely with the Business Software Association of Australia.

"Companies and people dealing in illegal Microsoft products are also likely to be dealing illegally in the products of other vendors," explained Scott Porter, Microsoft's regional OEM manager. "That's where we all work together with the BSAA," he said.

Specific moves to counteract illegal trade in Microsoft products include improvements to the Certificate of Authenticity (COA). This has been redesigned with the help of a leading banknote and travellers cheque printing company.

Sandi Partridge, Microsoft's OEM marketing manager, said it was important for everyone in the channel to make sure they were only handling legal products.

"Dealing in counterfeit products makes an uneven playing field," she said. "It means the genuine resellers are being ripped off by the illegal dealers just as much as Microsoft is being hurt.

"A lot of leads we get on illegal products come from the channel," said Partridge. "But the incidence of illegal trade is still too high although it has come down slightly," Partridge said.

Estimates by the Business Software Alliance and the Software Publishers Association indicate that about 35 per cent of all software in use is illegal.

Looking at the hard options, Microsoft's legal firm, Mallesons Stephen Jacques, has about 12 cases in hand. These range from minor infringements such as grey importing up to resellers hard loading counterfeit software and include the manufacture and sale of counterfeit CD-ROMs.

Maurice Gonsalve, a partner with the legal firm, said he expected about half the cases would proceed to court. "It is interesting to note that directors of companies are personally liable for breaches of copyright," he said. "In fact, directors of 'one-man' companies will invariably be liable."

In awarding damages against companies found guilty of illegal software operations, this could involve the directors of such companies liable for any fines and legal costs and could see them facing a jail term.

In protecting its copyright, Gonsalve said: "Microsoft will come down hard."

The company recently highlighted cases where it had won against organisations:

A Microsoft distributor provided the company with samples of counterfeit copies of MS-DOS and Windows for Workgroups. The samples were traced to Auschina Polaris, a Victorian software dealer. This company settled out of court and gave evidence against the company it alleged had supplied it with the software - Palm Beach Drive Pty Ltd.

Palm Beach Drive, from the Melbourne suburb of Patterson Lakes, admitted the infringements and liability to pay damages. However, Microsoft claimed that Steven Lagos, a director of Palm Beach Drive, was also liable. Both he and Palm Beach Drive were ordered to pay $132,750 in damages plus Microsoft's legal costs.

Settled out of court with the payment of damages and costs to Microsoft were cases against Laserbaud Australia and one of its directors, Robert Carbone of Clifton Hill, Victoria, while a case against the KT Group of companies is still proceeding.

Genuine Microsoft operating system products always have the COA affixed to the front of the manual. Resellers suspecting they are being offered illegal products should contact the BSAA hot line on 1800 021 143.

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