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Microsoft Sues Reseller For Copyright Infringement

Microsoft has accused PCExchange of allegedly distributing computers with illegitimate copies of Windows XP pre-installed.

PCExchange of Framingham, Mass., is accused by Microsoft of repeatedly selling computer systems to customers with unauthorized copies of Windows XP installed on the machines. According to court documents obtained by CRN, PCExchange (also known as "PCExchange.net") allegedly sold PC pre-installed with what it claimed was legitimate versions of Windows XP, but what Microsoft claims were unlicensed copies.

In its complaint against the reseller, Microsoft claims that on two separate occasions in late 2009, PCExchange sold PCs to investigators with unauthorized copies of Windows XP pre-installed, though court documents do not specify whether the investigators were private or government agents.

According to the complaint, Microsoft contacted the reseller in February of 2010 and ordered it to cease and desist from selling and distributing infringing copies of Microsoft software. But later that year, Microsoft claimed PCExchange once again distributed computers to an investigator that had unauthorized copies of Windows XP.

"These are not isolated incidents," Microsoft's complaint states. "Rather, defendants have been and continue to be involved in advertising, marketing, installing, offering and/or distributing counterfeit and infringing copies of Microsoft's software and/or related components to unidentified persons or entities."

Microsoft also claims that PCExchange is purposely misleading and confusing customers into believing that the Microsoft software on these systems is authentic and properly licensed.

PXExchange.com clearly states the following on its home page: "We use only Licensed Microsoft XP Professional, XP Home and OEM Windows or MAC OS software with the latest security updates, anti-virus protection, and restore media."

Microsoft is claiming unspecified damages from PCExchange's alleged practices, stating in the complaint that the reseller "illegally received money and profits that rightfully belong to Microsoft." As a result, Microsoft is seeking an injunction against PCExchange and demanding a detailed audit of products sold with counterfeit Microsoft software in order to determine the full extent of damages.

PCExchange owner Joseph "Jay" Anzivino is named as a defendant in the lawsuit. Contacted by CRN, Anzivino said "I don't have time for this," and provided no comment.

According to PCExchange's Web site, the company is a subsidiary of Merrimak Capital, a leasing firm based in Novato, Calif. However, Merrimak told CRN that information is false.

Merrimak said PCExchange is a reseller partner that sells some of Merrimak's leased equipment to clients in the New England area. But, Merrimak said it has no involvement or investment in the ownership or management of PCExchange.

Microsoft did not comment on the PCExchange case specifically, but Senior Microsoft Attorney Mary Jo Schrade told CRN that the number of copyright infringement cases involving resellers or Microsoft partners has waned in recent years. Schrade estimated Microsoft has filed approximately 1,000 lawsuits against channel partners, retailers and VARs since 2000, but says it's much less common today than 10 years ago.

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