Quebec reseller shuts down after losing $12 million lawsuit case

After having faced $700,000 in damages for counterfeiting Microsoft (NASDAQ: MSFT) software, pleading guilty to contempt of court for continuing to do so, and being fined to pay $100,000 by the Federal Court of Canada, Carmelo Cerrelli of Interplus Online, a Quebec based reseller, has been handed down yet another judgment, but this time from the United States District Court for the Central District of California for counterfeiting Symantec (NASDAQ: SYMC) software.

Symantec yesterday announced that the civil court in Los Angeles handed down a verdict that awarded the security software and solutions vendor $12 million in damages against Interplus, for its selling of counterfeit Symantec software throughout North America.

Cris Paden, a Symantec spokesperson on the issue, said while Interplus is based in Canada, the company was able to file a court case in the U.S. because Interplus also had offices in New York. The counterfeit software was being sold through Interplus’ New York office through sales off of the Internet, Paden explained.

The $12 million ruling makes this one of the largest single judgments awarded to Symantec in a software piracy case, Paden said.

“Twelve million dollars is the amount of damages we incurred as a result of the profits (Interplus) made from selling the counterfeit software,” Paden said. “If a legitimate piece of software costs $60, but (Interplus) was selling it for say $20 each, the damages we’d still lose would be $60 because it prevented someone from buying a legal version. Whether or not the ($12 million) is paid out, the main thing is we shut these guys down because we want to protect our users more than anything.”

Ram Manchi, president of Houston, Texas-based AGMA (Alliance for Gray Market and Counterfeit Abatement), says the issue of pirated software is a worldwide problem that is very commonplace these days.

The $12 million payout represents a big win for software-only companies like Symantec because they are staying vigilant in protecting their brand, Manchi says.

“This sets a precedence that tells the industry that software companies can defend their intellectual rights and protect their brands in the courts,” Manchi said. “In the U.S. and Canada, companies can make reference to this case, so we can continue to have something to hope for.”

Counterfeit software is not only illegal, but it also has the potential of posing further danger to end-users and their PCs, says Paden. Illegitimate software can damage one’s computer, or it can even be loaded up with spyware, which hackers can then use to “fleece” unsuspecting users, Paden adds.

Back in December 2006, Cerrelli was given a court order to cease counterfeiting Microsoft software. However, Cerrelli failed to do so, which eventually forced him to plead guilty to contempt of court over continuing to sell counterfeit software earlier this month. At this time, the Federal Court of Canada ordered Cerrelli to pay $100,000, with the possibility of jail time for up to 60 days if the fine is not paid.

Paden said there are a number of different ways Symantec catches wind of counterfeit operations.

“Users will come to us and tell us the software’s not working so we’ll investigate and do an analysis of the software,” Paden said. “We also have a brand protection task force that helps us with leads, and finally, we work with other companies and get tips that way too, because if someone’s selling fake Microsoft stuff, they’re probably selling fake Symantec stuff too.”

Symantec encourages that purchases be made through known sellers and also from those who have a “big brand name,” Paden advises. Often times, if the price being offered is much lower than the manufacturer suggested retail price, it’s probably too good to be true, he adds.

“If the software only comes in a white sleeve and it doesn’t come in an official (Symantec) yellow box with documentation, then that’s a tell-tale sign that the product’s counterfeit,” Paden said.

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Maxine Cheung
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