Counterfeit Issues: Microsoft Settles With PC Connection
Neither PC Connection nor Microsoft would offer details on the complaint filed in U.S. District Court in New Hampshire or on the settlement, but industry observers said PC Connection bought illegitimate Microsoft products from the gray market, some of which was then sold to a Microsoft investigator.
PIRACY FACTS
>> Business Software Alliance estimates $12 billion worldwide in counterfeit applications sold in 2000.
>> Criminal penalities for selling counterfeit software: 5 to 10 years imprsionment and fines up to $10,000 per offense.
>> Civil penalities for selling counterfeit software: Up to $150,000 fine per copyright infringement and up to $1 million per trademark infringemnet.
SOURCE: MICROSOFT
"The only thing I will say is that we only distributed what we believed to be legitimate Microsoft software," said Ken Koppel, CEO of PC Connection, Merrimack.
Counterfeit software sales by solution providers, either knowingly or unknowingly, is still a big problem, said Tim Cranton, corporate attorney in the antipiracy group at Microsoft.
The developer files between 150 and 200 piracy lawsuits against solution providers per year in the United States, Cranton said. He could not say how much Microsoft loses in revenue to counterfeit sales each year.
Solution providers may be tempted by the opportunity to make more money in a low-margin business, said Martin Wolf, CEO of Martin Wolf Securities.
"As a business owner, it's a very compelling option," Wolf said.
Although some resellers likely know they sell illegal software, many may not because the improved quality of the counterfeit products often makes them difficult to distinguish from the real thing, Cranton said.
"Great strides have been made in education and interest from law enforcement, but at the same time, we are seeing higher-quality counterfeit product coming into the United States from organized criminal enterprises," Cranton said. "Resellers should be very wary of offers that are too good to be true. The risk is not worth it."