Microsoft Chases Pirates Into Egypt, Netherlands

Bonnie MacNaughton, senior attorney with Microsoft's worldwide antipiracy team, says the cases aren't related to counterfeit software, but to genuine software that's being sold without the appropriate licenses.

In Egypt, software pirates have been diverting volume licensing versions of Microsoft software and selling it as retail versions, using counterfeit product license keys to install and activate the software, said MacNaughton. One reseller in Egypt used this tactic to reap "hundreds of thousands of dollars" in profit, she said.

In other cases, software is being diverted from discount programs that Microsoft offers to educational and volume licensing customers abroad and being imported and resold illegally in North America, she said.

Microsoft has traced illegal activity to its PC For Every Home Initiative in Egypt, in which the vendor offers low cost PCs and software, and to its Student Media Program, a worldwide effort in which Microsoft forms licensing agreements with schools to provide low cost software.

Microsoft has been consistently highlighting its successes in bringing software pirates to justice. In Microsoft's third quarter earnings call last month, CFO Chris Liddell said an increase of shipments of unlicensed PCs, particularly in Asia, was partially responsible for a 25 percent drop in OEM revenue during the quarter.

Last November, Citigroup analyst Brent Thill said Microsoft's efforts to battle software pirates could add up to an extra $1 billion in fiscal 2008 revenue.