Microsoft Sues Tustin Firm in Piracy Battle

Launching a new attack on industry piracy, Microsoft Corp. said Wednesday that it has sued a Tustin company and two other Southern California computer assemblers as an outgrowth of “continuous sweeps” at swap meets and other sales venues.

The software giant, whose Windows 95 system operates most personal computers, accused the companies in federal lawsuits of copyright and trademark infringement. The suits, filed in Los Angeles, said the companies allegedly loaded unlicensed Microsoft products onto computers they sell.

The Redmond, Wash., company said it also has settled privately with four other Southern California makers of PC clones.

In announcing continuous sweeps, Microsoft is taking a more aggressive course against the small systems builders, as they prefer to be called. It also indicates that previous periodic attempts to halt some of the more prevalent forms of piracy simply haven’t worked.

“We’re now much more proactive,” said Jim Lowe, a Microsoft lawyer spearheading the campaign. “In the past, we’ve gone to swap meets from time to time. But now we have undercover investigators at those swap meets all the time--at every one of them.”

Although Microsoft is making sweeps throughout the country and in Canada, its crackdown is aimed especially at Southern California, where the company finds the biggest group of offenders. Lowe called the computer swap meet in Pomona a “black hole” for the company’s products.

About 20% of the “several hundred” piracy complaints it gets every month involve Southern California companies, he said. “We don’t see it at the same volume in the Bay Area or in the New York-New Jersey area. Nothing equals what we see in Southern California.”

The main reason is the preponderance of clone makers in the area. He said they use the same copy of Windows 95, for example, to load onto the hard-disk drives of numerous machines, and sometimes provide bootleg copies of the programs with the computers they sell.

Microsoft filed suits against Comp America in Tustin, BMI Computers Inc. in Los Angeles and Macro Computer Communication in the city of Industry. Microsoft said it tried to negotiate settlements with the three small operators before suing.

BMI’s lawyer, Ehsan Afaghi of Beverly Hills, charged that Microsoft simply “bulldozed” over the small computer assemblers. BMI’s owner, he said, “buys products in the marketplace and is not in a position to decide which is counterfeit.”

It turned out that some of the merchandise “was not registered under Microsoft,” Afaghi said. BMI also loaded some software into computers, but “never got any money” for it, he said, and Microsoft now wants $21,000. “That’s maybe half my guy’s income for a year,” he said.

Anant Krishna, general manager of Comp America, said he wasn’t aware of the allegations. “Our software comes from [a Microsoft distributor], so it should be authorized,” he said.

The lawsuits were filed late last month. Lowe said Microsoft didn’t release information on the suits sooner because it was negotiating with the other four companies, which he wouldn’t name.