Microsoft is on the war path. Court documents reveal that Microsoft has filed two more cases against software pirates in the US. One of the cases is against National Technology Rentals, Inc. (NTR) and Lawrence Gazdick individually. Microsoft alleges that the defendants have infringed their copyrights and trademarks, violated the Lanham Act by falsely designating the origin of software, and engaged in unfair competition. This is Microsoft's third case against software pirates over the last week with a fourth case having just been filed against ATR Computers Inc. Is this sudden rash of cases filed against software pirates a trend or a dedicated campaign? In the end, time will tell, but at this point in time, it looks like a concentrated campaign with many more cases on the way.
Overview of Microsoft's Complaint
According to Microsoft's complaint, the defendants have infringed Microsoft's copyrights and trademarks, violated the Lanham Act by falsely designating the origin of software, and engaged in unfair competition.
Allegedly Infringed Microsoft's Copyrights
Microsoft further noted that the defendants Willfully Infringed Microsoft's rights in the following federally registered copyrights:
(1) TX 7-009-361 ("Windows 7");
(2) TX 6–504-552 ("Office Ultimate 2007");
(3) TX 6–524-395 ("Office Access 2007");
(4) TX 6–524-399 ("Office Excel 2007");
(5) TX 6–524-393 ("Office Outlook 2007");
(6) TX 6–524-389 ("Office PowerPoint 2007");
(7) TX 6–524-388 ("Office Publisher 2007");
(8) TX 6–524-398 ("Office Word 2007");
(9) TX 7-510-988 ("Office Communicator 2007")
(10) TX 6-524-390 ("Office Groove 2007");
(11) TX 6-524-392 ("Office InfoPath 2007");
(12) TX 6-524-396 ("Office OneNote 2007");
(13) TX 6-524-397 ("Office Project Professional 2007");
(14) TX 7-348-992 ("Project Professional 2010");
(15) TX 7-219-968 ("Office Professional 2010");
(16) TX 7-206-461 ("Access 2010");
(17) TX 7-218-085 ("Excel 2010")
(18) TX 7-206-501 ("Outlook 2010");
(19) TX 7-219-973 ("PowerPoint 2010");
(20) TX 7-206-489 ("Publisher 2010");
(21) TX 7-206-498 ("Word 2010");
(22) TX 7-206-468 ("InfoPath 2010");
(23) TX 7-206-464 ("OneNote 2010"); and
(24) TX 7-206-481 ("SharePoint Workspace 2010");
Allegedly Infringed Microsoft Trademarks
Microsoft additionally noted that the defendants willfully infringed Microsoft's rights in the following federally registered Trademarks:
(1) 1,200,236 ("MICROSOFT");
(2) 1,872,264 ("WINDOWS");
(3) 2,744,843 (COLORED FLAG DESIGN);
(4) 2,738,877 (B/W FLAG DESIGN);
(5) 1,475,795 ("POWERPOINT");
(6) 3,160,976 (B/W FOUR SQUARE LOGO);
(7) 1,741,086 ("MICROSOFT ACCESS");
(8) 1,982,562 (PUZZLE PIECE LOGO);
(9) 2,188,125 ("OUTLOOK");
(10) 2,890,260 ("INFOPATH");
(11) 2,844,710 ("ONENOTE");
(12) 1,256,083 ("MICROSOFT");
(13) 1,816,354 (WINDOWS FLAG LOGO);
(14) 1,815,350 (COLORED WINDOWS LOGO);
(15) 3,486,459 (EXCEL LAUNCH ICON (2007);
(16) 3,360,916 (OUTLOOK LAUNCH ICON (2007);
(17) 3,486,464 (ONENOTE LAUNCH ICON (2007);
(18) 3,360,914 (WORD LAUNCH ICON (2007); and
(19) 3,370,871 (GROOVE LAUNCH ICON (2007)
Microsoft seeks damages, an accounting, the imposition of a constructive trust upon Defendants' illegal profits, and injunctive relief.
Microsoft's Detailing of the Defendant's Infringement
Defendants are engaged in the advertising, marketing, renting and distribution of desktop and notebook/laptop personal computers and/or other devices (collectively, the "PCs" or "Defendants' PCs") containing computer software, including programs covered by Microsoft's registered copyrights and bearing Microsoft's registered Trademarks or imitations thereof. Defendants are engaged in interstate commerce and provide products and/or services to numerous customers in several states, including Connecticut.
Microsoft has examined various PCs rented/distributed by the Defendants within and outside of the state of Connecticut, including the software installed thereon. Based upon these examinations, Microsoft has learned that the Defendants copied, installed, and/or distributed counterfeit Windows 7 Ultimate, Office Enterprise 2007 (and included suite of programs), Office Professional Plus 2010 (and included suite of programs), Project Professional 2010, and Project Professional 2007 software and components (collectively, the "Microsoft Software") in connection with their rental PCs. Based upon information and belief, the Defendants distributed counterfeit Microsoft software to numerous customers over an extended period of time.
Defendants' rental/distribution of infringing products are substantial. On information and belief, Defendants rent as many as 2,500 PCs per week and charge approximately $100 per computer per week. Assuming Defendants rent 2,500 PCs per week, Defendants generate approximately $250,000 per week ($1,075,000 per month; $12,900,000 per year; and $38,700,000 over the past three (3) years) in revenue. Based upon a typical RRL, the license fees owed to Microsoft for that volume exceed $89,000 per month ($1,068,000 per year; and $3,204,000 over the last three (3) years).
On information and belief, Defendants' rentals/distributions of products containing counterfeit software are not isolated incidents. Rather, Defendants have been and continue to be involved in advertising, marketing, rental and/or distribution of PCs that include infringing copies of Microsoft's software to unidentified persons or entities. On information and belief, Defendants' distributions of purported Microsoft software are the result of Defendants' advertising and marketing the availability of such materials.
On information and belief, Defendants' wrongful conduct includes the advertising, marketing, renting, and/or distribution of "infringing materials," specifically reproductions, copies, or colorable imitations of the Microsoft copyrighted software and/or the Microsoft Trademarks and logos described in this Complaint. In furtherance of those wrongful acts, Defendants distribute, enter and/or otherwise utilize unauthorized product keys to circumvent technology designed by Microsoft to prevent infringement.
On information and belief, Defendants have committed and are continuing to commit acts of copyright and trademark infringement against Microsoft. On information and belief, at a minimum, Defendants were willfully blind and acted in reckless disregard of Microsoft's registered copyrights and marks.
On information and belief, as a result of advertising activities and/or PCs that include unauthorized reproductions or uses of Microsoft's marks, Defendants have misappropriated Microsoft's advertising ideas and style of doing business and have infringed Microsoft's copyrights, titles, and slogans.
On information and belief, the injuries and damages that Microsoft has sustained have been directly and proximately caused by Defendants' wrongful conduct and infringement of Microsoft's copyrights and marks.
Microsoft Filed 7 Counts against the Defendants
Count 1: Copyright Infringement
Count 2: Trademark Infringement
Count 3: False Designation of Origin
Count 4: Common Law Unfair Competition
Count 5: Violation of the Digital Millennium Copyright Act
Count 6: For Imposition of a Constructive Trust upon Illegal Profits
Count 7: Accounting: The amount of money due from Defendants to Microsoft is unknown to Microsoft and cannot be ascertained without a detailed accounting by Defendants of the precise number of units of infringing material offered for distribution and distributed by Defendants.
The patent infringement case presented in today's report was filed in the Connecticut District Court, New Haven Office. The Presiding Judge in this case is noted as being Judge Janet C. Hall.
The fourth case that we noted in our opening summary was filed in the Michigan Eastern District Court under case number 2:2014cv12568 with the Presiding Judge being Nancy G. Edmunds. The focus of that case is Trademark Infringements.
The other two case filed in the last week were covered in the following Patently Mobile reports: Microsoft Sues Ocean Enterprises for Alleged Software Piracy & More and Microsoft Sues EZPC for Alleged Software Piracy & Much More.
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