MS anti-piracy crew puts Suffolk dealer in the stocks

Don't sing if you're glad to be grey

Pity Russell Simpson, joint owner of Suffolk-based resellers Greengage Computer Products, who has not only forked out an undisclosed sum in compensation for unwittingly flogging counterfeit copies of Microsoft software, but sentenced to the stocks too.

For Simpson has been dragooned into supplying warning words in a Microsoft UK press release decrying the
evils of grey imports.

Certainly, the unfortunate Simpson illustrate the possible pitfalls of dealing with unfamiliar suppliers, who may turn out to be crooks ... and if they are crooks, expect little mercy from the Beast.

Microsoft confidently states in its press release (republished in full below) that the "sale of parallel imported software is illegal" - but it ain't necessarily so.

The legal arguments here in the UK are yet to be properly tested in court, and in the meantime it is possible for resellers to sell legitimate grey market product. Microsoft's line is the vast majority of grey market product advertised at cut-price rates is counterfeit, but not all of it is - so resellers can sell grey market imports lawfully, under certain conditions.

Matthew Rippon, a litigator specialising in intellectual property and IT at law firm Prettys, told uslast November that a couple simple things that have to be established first: is the product genuine; and has it been marketed to the EEA (European Economic Area) with Microsoft's consent?

Once these points have been verified, then Microsoft's trademark rights are exhausted, which means it has no further control over who brings it to market and at what price.

Rippon says the matter is about trademark law, not copyright law (as illustrated by the recent case of Tesco vs Levi Strauss.

So if a local trader gets its hands on software from the EEA cheaper than other resellers, it is entitled to flog it on to consumers at a reduced price without falling foul of trademark law.

Although MS cannot stop UK resellers buying and selling OEM software sold within Europe, UK resellers are interested in selling English-language versions only. The greatest source is the US.

In the US, Microsoft cannot legally enforce conditions of resale, and in the UK, it cannot legally enforce conditions of resale. But software originally intended for the US has not been marketed within the EEA. As trademark holder, Microsoft can, armed with the Tesco precedent, choke supply into the EU from this source. ®

Suffolk computer dealer falls foul of counterfeiters

Reading, 15th November 2002 - Suffolk-based Greengage Computer Products has agreed to pay Microsoft an undisclosed sum in compensation after the company unwittingly purchased and sold on counterfeit copies of Microsoft software including Microsoft Office 97 and Microsoft Office 2000 software licences.

In 1999 Russell Simpson, joint owner of Greengage Computer Products with his father Roy, checked out one of the many offers for cut price software he regularly received. Initially suspicious, Russell asked the supplier for product samples. The apparent quality of the Certificates of Authenticity and licences suggested to Russell that these were genuine Microsoft products.

When Russell enquired further, the bogus supplier advised him that they were competitively priced because they originated outside Europe - sourced via the so-called 'grey market.' Greengage was unaware at the time that the sale of such parallel imported software is illegal [our emphasis].

Russell Simpson insists Greengage didn't knowingly purchase counterfeit software. He said: "to me, it was indistinguishable from the genuine product. The licences looked exactly the same as those you receive with a genuine shrink wrapped, boxed retail software package."

Don't get caught out like Russell did. Use the Microsoft Product Identification Service to have experts check the legitimacy of products you are offered. For more information on the Product ID Service please visit www.microsoft.com/uk/piracy/productid. Information on how to spot pirated software is also available on www.howtotell.com/uk. You may also wish to consider doing background checks on suppliers, such as credit checks, in case they sell you illegal products.

Caroline Smith, UK Channel Anti-Piracy Manager at Microsoft said, "Microsoft recommends that you buy your software from an authorised source or buy products that you know originated from someone licensed by Microsoft to distribute its products in Europe." An up-to-date list of the Authorised European Microsoft Distributors based in the UK can be found on www.microsoft.com/uk/partners.

Microsoft is currently engaged in a nationwide programme to combat software piracy. On a daily basis the Microsoft investigative teams are identifying companies who have traded in illegal software. Many have been lured by the 'too good to be true' offers that arrive on fax machines and email inboxes all too frequently. Many resellers like Greengage who have recently settled with Microsoft were shocked to find they were dealing in illegal software. The message is clear. It is crucial to check that products you trade in are legitimate.

Russell Simpson says of his purchase of counterfeit software: "This was a very stressful and expensive experience. We sell a lot of genuine Microsoft software and value our relationship with Microsoft. Microsoft have been very supportive and fair in their dealings with us throughout this episode, but we would not like to have to go through this experience again and would urge others to exercise care when sourcing Microsoft products."

Greengage has taken it upon itself to ensure that staff training and awareness of the piracy issues and risks is improved. Staff now know what to look for when dealing with new suppliers, and all purchasing decisions are authorised by Russell Simpson himself.

Russell now believes that purchasing software from unauthorised distributors is just not worth the risk to his business. He said, "If a product lands on your desk from whatever source and you see a price that appears to be too good to be true, it probably is!"

Related Stories

Software Imports - A Grey Area?
This is what Microsoft said about grey imports in 1998
Grey software is not black and white
The Tesco ruling - what does it mean for grey MS software?
Grey market resellers hit back at MS 'intimidation'