Symantec Settles Suit

It could have been worse. The mammoth figure is actually a settlement between Mastrogiovanni and Symantec, a deal that allows Mastrogiovanni to avoid what he feared would be a long and much more costly process of litigation defending against charges that Papa B sold counterfeit Symantec software. Mastrogiovanni agreed to the settlement voluntarily. No jury heard the case.

Take heed, software solution providers. By Symantec's estimates, there's as much as $350 million worth of bootleg Symantec software out there looking for a buyer. Aside from the case resolved last week, Symantec prevailed in similar cases against Maryland Internet Marketing (MIM) in December 2003, eCommerce in October 2003 and CD Micro in September 2003.

In Mastrogiovanni's case, it might have been different if he had cooperated more with Symantec, said Joy Cartun, senior director of legal affairs. "We go out and find out what people are actually selling, and when we find [counterfeit Symantec] products, we contact them," Cartun said. "Some are cooperative immediately, and for the most part we don't put those folks' feet to the fire. But in this particular case, my recollection is that to the extent that [Mastrogiovanni] was disclosing information, it was foot-dragging and incomplete."

This saga begins during the 2002 Christmas season, when Mastrogiovanni was discounting Papa B's Symantec software sales through eBay auctions, a common practice. But then Mastrogiovanni said he got a call from Symantec alerting him that the company had covertly been one of Papa B's eBay auction winners, and that after inspecting the so-called Symantec software it had discovered that the product was counterfeit.

"[Symantec] said they purchased a CD and said it was counterfeit," Mastrogiovanni said. "And I was surprised, but I cooperated. I thought we had a good relationship. They gave me the [International Federation of the Phonographic Industry] numbers to watch out for. And I agreed that if some copies got out the wrong way, it was wrong. So we gave them vendor names, where we order from, wholesale order numbers. We tried."

Mastrogiovanni said Symantec kept the pressure on until finally he'd had enough. He had his lawyer draft a letter to Symantec requesting it leave Papa B alone, a decision Mastrogiovanni said he now regrets.

Mastrogiovanni said he believes he angered Symantec executives with the legal riposte, "so they came after me with a vengeance."

Symantec followed the letter from Mastrogiovanni's lawyer by presenting additional evidence that Papa B was selling bogus Symantec software, pointing to "a microscopic mark on the CDs that Symantec said could be used as proof the software was counterfeit," Mastrogiovanni said.

Faced with the new evidence, Mastrogiovanni felt he would be unable to afford to defend himself. "I'm a small company, I don't have the money to dispute something like this from a company the size of Symantec," he said.

So maintaining his innocence, Mastrogiovanni reluctantly accepted the terms of the settlement, which still "requires him to provide assistance to Symantec in its investigative actions against other suppliers of counterfeit Symantec software," according to a Symantec statement.