Microsoft Canada charges systems builders with piracy

Microsoft Canada Co. has taken its battle against piracy and counterfeit acts to another level by launched legal action against three system builders over alleged copyright and trademark infringement.

The cases involve three system builders in Ontario and Nova Scotia and were filed between September and December 2007 in the Federal Court of Canada. Michael Hilliard, corporate counsel at Microsoft Canada, would not disclose any information and/or details about the defendants involved in the lawsuits.

“These cases are part of a broader enforcement campaign to demonstrate just how serious we are about piracy and unlawful acts,” Hilliard said. “We would prefer if resellers respected our intellectual property and I think it’s unfortunate that we had to go the route of bringing in lawsuits, but this is important and we felt we had to take these steps,” he added.

In each case, Microsoft Windows XP Home operating system, Microsoft Windows XP Professional and Microsoft Office Professional Edition 2003 software were believed to have been hard disk loaded onto computers. Hard disk loading, Hilliard explained is when unlicensed software is installed on a computer and the CD-ROM and authenticity label is not given to the end-user.

“We sell software to our distributors and they then distribute it to resellers and system builders,” Hilliard said. “Sometimes system builders will take the CD and will install it on multiple computers, when in fact each one is supposed to come with one CD and certificate that correspond with each computer.”

Microsoft Canada is seeking injunctive relief, a detailing of the defendants’ profits, statutory, punitive and exemplary damages, in addition to declaratory relief in each case.

“Our hope is that we can settle these cases so it’s favourable to both sides,” Hilliard said. “We want to convince them to stop taking part in these unlawful acts.”

According to Stephen Selznick, a partner at Toronto-based law firm Cassels Brock & Blackwell, to the extent that there’s a registration of copyright, that party is entitled to an injunction where the defendant is ordered not to commit the act brought up in the court.

“(Microsoft is) also entitled to the actual damages of what they lost,” Selznick said. “But sometimes in copyright infringement cases, actually proving what your damage is is very difficult. On the defendant side, losing this kind of a case will be a significant economic issue and it may also be a death now for these businesses unless they find another vendor (to work with),” he added.

Hilliard is hoping that the more cases that are addressed will lead to more public awareness about the dangers and risks that are associated with piracy.

“The message to our channel partners is that we take both their concerns and ours very seriously and we will continue to aggressively pursue people who engage in these unlawful acts to make sure we have a level playing ground for all of our resellers,” Hilliard said.

These litigations were filed a few months ago, Hilliard said. A court date has not yet been set. He added that depending on the judicial steps needed to be taken, it could be anywhere between a year or two before the cases are brought up in court.

Selznick said up until this point, Microsoft has been fairly successful in the Federal Court of Canada. Especially with cases like this one, he also says Microsoft would have had to have done their homework. However, he notes that the cases are still in the discovery stages.

“This is a civil lawsuit so they’ll have to run their course,” Selznick said. “Things do move fairly quickly though and there will be some sort of status hearing within a year. These cases are good examples to show that the legal community is taking these cases seriously and it’s a message to the defendants that this is not something you can get away with.”

On Microsoft’s end, Hilliard said, “Moving forward, we’ll continue with our three-prong approach at Microsoft against software piracy, which includes education, engineering and enforcement. We’re hoping that when more people find out about these cases, they’ll be deterred from committing these activities in the future.”

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Maxine Cheung
Maxine Cheung
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