Microsoft Sues Over Black Market Software

Microsoft filed a complaint against Office Solutions USA LLC et al earlier in the week in the Southern District of Florida for trademark infringement over the defendants’ purported sale of infringing Microsoft software to consumers who believe that the defendants are licensed distributors and that they are purchasing legitimate Microsoft software.

According to the complaint, the defendants are “prolific distributors of black market access devices to Microsoft software that they unlawfully advertise to consumers as genuine software. As a major part of their sales, Defendants instruct their customers to acquire, install, and activate copies of Microsoft software with the access devices. This software is either from counterfeit download sites or Microsoft sites that require the purchase of licensed software.” Microsoft averred that the defendants use its trademarks and trade dress in the marketing and sales material without Microsoft’s permission in order to deceive consumers “about the characteristics, origin, and authenticity of the software.” Microsoft claimed that consumers are mistakenly led to believe that they have legally licensed software, but in actuality they do not.

Specifically, Microsoft asserted that the defendants’ infringing “black market access devices” have “product activation keys which are uncoupled from the genuine, licensed Microsoft software they were intended and authorized to activate and sold by Defendants on a ‘stand-alone’ basis separate from the original licensed software.” According to Microsoft, these black market access devices also had tokens for pre-installed software on Original Equipment Manufacturer (OEM) devices and were “only authorized for use by specific OEMs for devices in China.” Additionally, the access devices also allegedly had credentials for unlicensed Office 365 cloud accounts, which were created and disseminated without Microsoft’s authorization. Microsoft proffered that these “[d]ecoupled product keys, OEM tokens, and unauthorized credentials do not constitute or represent licenses for Microsoft software. They are merely technology tools that Microsoft provides customers and its supply chain partners to access, install and activate copies of legally licensed software.” As a result of this purported decoupling and disassociation from the software and authorized devices, Microsoft claims that these tools “do not have any independent value other than to deceive unwitting consumers into acquiring copies of pirated and unlicensed software.” Consequently, Microsoft alleged that the defendants have financially benefited from their alleged unlawful conduct, while misrepresenting themselves as “legitimate distributors of licensed Microsoft software.” Meanwhile, Microsoft also claimed that the defendants knew that they were engaging in copyright and trademark infringement via their sale of unauthorized access devices. Accordingly, the defendants allegedly deceive consumers to purchase “unlicensed and counterfeit copies of software when they think they are buying genuine, licensed software.” As a result, Microsoft argued that consumers, legitimate commerce, and the software business have purportedly been harmed by the defendants’ aforementioned conduct.

The defendants are accused of contributory copyright infringement, trademark infringement, false designation of origin, false and misleading representations and descriptions of fact, and trade dress infringement.

Microsoft has sought a declaratory judgment in its favor; to permanently restrain and enjoin the defendants from further unlawful conduct, an award for damages; to impound all infringing software, product activation keys, and other related items; for the ill-gained profits to be held in a trust; an award for damages; an award for costs and fees; and other relief.

Microsoft is represented by Gelber Schachter & Greenberg, P.A. and Davis Wright Tremaine LLP.