Flurry of Microsoft Lawsuits Allege Fraud

Microsoft filed 10 lawsuits in federal court accusing three companies and nine individuals of illegally selling Microsoft software.

The lawsuits, unveiled Thursday, involve companies in Florida, Ohio and Pennsylvania. Microsoft accused:

  • Comp-Discounts Software in Boca Raton, Fla. of distributing counterfeit copies of Windows 98 and Office 2000 Professional
  • Auction Hut of Toledo, Ohio, of distributing counterfeit copies of Windows XP Professional and Office 2003 Professional.
  • Computer Techs of Grove City, Pa., of distributing counterfeit copies of Windows XP Professional, Office XP Professional and Money 2004.

    Microsoft credited consumer complaints through the (800) RU-LEGIT hotline for initiating a process that ended with the lawsuits against the three companies.

    Microsoft claims it purchased software from each of the defendant companies to test the authenticity of a consumer complaint. The company then sent cease-and-desist letters with "educational information about how to operate legally" before filing suit.

    All of the cases against individuals involved Microsoft Action Pack Subscriptions (MAPS), a program that allows members of the Microsoft Partner program to receive bundles of free software for internal use and evaluation. The idea behind the program is to give partners an inexpensive way to get familiar with the Microsoft software that the partners will resell or build on for customer solutions.

    In all, Microsoft filed seven federal lawsuits, naming nine individuals, in the MAPS cases. Four of the individuals live in California and two live in New York. The others live in Maryland, Texas and Virginia.

    Microsoft said the individual lawsuits are the first involving the MAPS program. The company said it became aware of problems through its own monitoring. The defendants are accused of falsifying information to receive program benefits and software titles multiple times and selling the titles, sometimes through online auction sites. To participate in MAPS, the subscriber must agree to subscribe only once per year, agree not to sell the software and agree to use it only at the partner's primary business location. The Action Packs cost about $299 for a yearly subscription, which provides a partner with about $50,000 worth of software.

    In a statement, Microsoft said the MAPS-related cases "allege egregious abuse of this program by people who have repeatedly and knowingly broken the terms of the agreement."

  • About the Author

    Scott Bekker is editor in chief of Redmond Channel Partner magazine.