Feeds

Court punishes software sellers 'not lining Bill Gates's pockets'

'I'll do you an Office without a licence for £85'

Boost IT visibility and business value

Microsoft has won a judgment against three individuals behind a company which unlawfully sold genuine and counterfeit Microsoft software and certificates.

The three were found to be selling counterfeit software and of selling 'loose' certificates of authenticity – i.e. certificates not attached to computers – in breach of the licence terms of the software.

Judge Richard Havery of the High Court issued a summary judgment for Microsoft, which means that he found in the corporation's favour and that the case will not go to a full trial.

Havery wrote in his judgment that "there is no real prospect of any of the defendants resisting" the various claims, and that "there is no other compelling reason why the case should be disposed of at a trial".

Among the evidence produced were transcripts of conversations which Microsoft claimed took place between a test purchaser, Kenneth Anderson, and Edward Hill, the principal salesman of the company involved, Digital Now! Limited.

Hill was quoted as telling Anderson, whom he thought was a buyer, "I can do you an Office 2003 [Microsoft software] without a licence for eighty-five quid. The licensed version is one hundred and eighty-five quid. With the eighty-five quid one we're not lining Bill Gates's pocket. If he's installing it in a business or something he might want to do the licence. He might want to do it properly."

Hill claimed that his remarks were taken out of context and that the confusion arose because he did not know if Anderson had a volume licence. "The reference to not lining Bill Gates's pockets was to emphasise that there was no point in paying twice for the same right," he said in his witness statement.

Havery ruled that: "It is clear on the totality of the evidence that there is no real prospect of any of the defendants successfully defending the claim against them that Digital to their knowledge traded in counterfeit products of Microsoft".

The defendants in the case, two of whom owned the company between them, argued that in some of the cases they were trading in licences for which Microsoft had already been paid.

The defence argued that if a large organisation, such as a bank, bought a large number of computers and never used the bundled Microsoft software and sold on the licences, that a company such as Digital could sell those licences, for which Microsoft had already been paid.

The judge rejected the argument. "The fallacy in the argument is that if the bank does not accept the EULA [licence] terms [by operating the software and agreeing the terms], it receives no licence. Thus it can confer no licence for the use of any Microsoft software by passing on the COA (certificate of authenticity), nor can the COA be evidence of, or itself confer, such a licence. Thus, provided that the licensing system is enforceable in law, the circumstances exemplified cannot give rise to a legitimate trade in COAs."

In fact, there are circumstances in which disused or unwanted volume licences for some Microsoft software can be transferred; but this trade must be compliant with Microsoft's own transfer terms and conditions.

Havery gave judgment for Microsoft, including its claim for additional damages to be assessed.

See: The judgment

Copyright © 2006, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

Build a business case: developing custom apps

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
White? Male? You work in tech? Let us guess ... Twitter? We KNEW it!
Grim diversity numbers dumped alongside Facebook earnings
Microsoft: We're making ONE TRUE WINDOWS to rule us all
Enterprise, Windows still power firm's shaky money-maker
HP, Microsoft prove it again: Big Business doesn't create jobs
SMEs get lip service - what they need is dinner at the Club
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.