How much does it cost to infringe on Microsoft’s copyright?
In the case of local reseller, iiBuy, the answer is $116,000 - the amount awarded by the Federal Magistrates Court of Australia to Microsoft in damages.
The court action came about after Microsoft discovered that iiBuy was allegedly offering computer systems for sale from their retail outlet, on their website and on eBay that came pre-installed with unauthorised copies of Windows 7.
The reseller billed the included Windows 7 as a “trial version” but Microsoft does not offer such a Windows license program, It was alleged by Microsoft that this was a case of piracy and the company took action to deal with the alleged copyright infringement.
Microsoft Australia attorney, Clayton Noble, said the outcome was not a court verdict but rather consent orders from the court, as Microsoft had already begun proceedings.
“The reseller, iiBuy, came back to discuss the situation with us and settle the case before it went to hearing,” he said.
Noble was “very pleased” to have the matter settled, because Microsoft did not want to “run these things to court”.
“When we find piracy in the market, we always try to engage in a discussion with people we’ve caught,” he said.
“It’s unfortunate that in this case that we had to start proceedings before that discussion happened, but we are pleased that it was settled and with the settlement result.”
iiBuy’s illegal selling of computer systems loaded with unauthorised copies of Windows 7 came to light when it was reported to the Microsoft by a competing reseller.
Noble said this was how these cases were often uncovered.
“We scour the market ourselves and have our investigators out there, but our biggest source of leads of piracy is the resellers that are doing the right thing,” he said.
“They don’t like to see their market dirtied by piracy, because it allows their competitors to unfairly undercut them.”
For Microsoft, it is invaluable when resellers come to them and tell the vendor about something they see happening in the market which is unfair.
“In this case, as with all cases, we review each case thoroughly, investigate it and take action,” Noble said.
According to Noble, this was the first action that Microsoft had taken against iiBuy.
“The damages agreed reflect the scale of the infringement conducted by iiBuy,” he said.
When Microsoft had discussions with the reseller proprietor when settling this cause, the vendor found that the proprietor was concerned about what they saw happening in the market. This included other resellers competing with them on eBay and in bricks-and-mortar in the sale of PCs, and businesses engaging in this type of behaviour.
Either way, Noble said it was an illegal form of providing Windows to customers, one that Microsoft is taking action to stamp out.
“One of the key messages I want to get across to resellers is when you see unlawful use of copyright that undercuts your business in the market, the correct response is to report it to Microsoft, because we do take action to stamp it out,” he said.
The reason Microsoft takes action is to protect its consumers and business customers.
“For them to get an unactivated and unlicensed copy of Windows without a key is a bad consumer experience, and that is why we don’t sell Windows that way,” he said.
“We need to make sure when consumers get a PC preinstalled with Windows, it is a genuinely licensed copy that is ready to work and use straight away.”
While Microsoft does not disclose specific piracy rates for particular products, though it does measure them internally, Noble refers to the Business Software Alliance’s measure of piracy rates in the market generally for all PC software.
“Every year since 2004, the Business Software Alliance has found that the Australian piracy rate has fallen by one per cent per year,” Noble said.
As such, he sees it as a battle that “Microsoft and other software providers are winning”.
“That’s through a combination of enforcement efforts like this, awareness, and the continuing improvement in technical measures to ensure that consumers and small businesses that purchase software get the genuine licensed product and aren’t ripped off by being sold pirated software,” Noble said.