Microsoft Sues Over Copyrights
As part of an aggressive effort to stamp out software piracy, Microsoft Corp. filed lawsuits Tuesday against five Southern California computer companies alleging copyright and trademark violations.
Microsoft sued San Gabriel-based Computer Direct, Industry-based Zenon and Pasadena-based Elite Computers for allegedly distributing counterfeit Microsoft products. The firm also sued Long Beach-based Beta Computers and Norwalk-based US Computers, contending they loaded unauthorized copies of Microsoft programs onto computers that were then resold.
“Southern California is a hotbed of software piracy,” said Anne Murphy, a Microsoft corporate attorney. She estimates that in 1997 California lost more than 18,900 jobs and $2.5 billion in lost wages, retail sales and tax revenues from software piracy.
As a major portal to the Pacific Rim, Southern California began as an entry point for pirated products from Asia. Over time, “piraters found it safer and easier to do the manufacturing here,” Murphy said.
Fourteen alleged members of a software piracy ring have been convicted or are awaiting trial in federal court, authorities said.
The group, controlled by organized crime in mainland China, counterfeited millions of dollars in Microsoft software--duplicating everything from CD-ROMs to manuals and even the authenticating holograms, said Westminster police, who uncovered the group.
Officials say the 14 arrested were mid-level operatives of a much larger organization that continues to sell counterfeit software throughout the world.
“This is one of the biggest cases that’s ever been produced, if not the biggest,” said Westminster Police Chief James Cook.
Investigators recovered $3 million in pirated software from the group last year, they said. Cook estimates the ring made at least $20 million to $25 million a year selling the software.
Westminster police uncovered the ring in May 1997, when officers raided a Little Saigon print shop and found thousands of counterfeit manuals for Microsoft products. Later, working with U.S. Customs agents, investigators discovered a major operation throughout Southern California, involving organized crime from mainland China and Taiwan.
In recent years, Microsoft has sued more than 100 counterfeit manufacturers and so-called resellers, more than a third in Southern California. The manufacturers typically print manuals and copy software onto hard drives and CD-ROMs. The loaded computers are distributed through resellers who typically sell the machines to small-business customers.
Since they don’t pay license fees for the software, the resellers earn higher profit.
Microsoft software allegedly sold illegally by the five companies sued Tuesday included counterfeit versions of Microsoft’s Windows 95 and Windows NT operating systems as well as its Office 97 personal productivity software suite.
Microsoft says low prices, handwritten labels, photocopied manuals and missing certificates of authenticity are likely signs that the products are pirated.
Times Community News correspondent Harrison Sheppard in Orange County contributed to this report.
