Microsoft Files Copyright Suit Against 5 Southland Firms

As part of an aggressive effort to stamp out rampant software piracy, Microsoft Corp. filed lawsuits Tuesday against five Southern California computer companies, alleging copyright and trademark violations.

Microsoft sued San Gabriel-based Computer Direct, Industry-based Zenon and Pasadena-based Elite Computers for allegedly distributing counterfeit Microsoft products. The firm also sued Long Beach-based Beta Computers and Norwalk-based US Computers, contending they loaded unauthorized copies of Microsoft programs onto computers that were then resold.

“Southern California is a hotbed of software piracy,” said Anne Murphy, a Microsoft corporate attorney. She estimates that in 1997 California lost more than 18,900 jobs and $2.5 billion in combined lost wages, retail sales and tax revenues from software piracy.

As a major portal to the Pacific Rim, Southern California began as an entry point for pirated products from Asia. Over time, “piraters found it safer and easier to do the manufacturing here,” Murphy said.

Fourteen alleged members of a software piracy ring already have been convicted or are awaiting trial in federal court, authorities said.

The group, controlled by organized crime in China, counterfeited millions of dollars in Microsoft software--duplicating everything from CD-ROMs to manuals and even the authenticating holograms, said Westminster police, who uncovered the group.

Investigators recovered $3 million in pirated software from the group last year, they said. In recent years, Microsoft has sued more than 100 counterfeit manufacturers and so-called resellers, more than a third of them in Southern California. The manufacturers typically print manuals and copy the software onto hard drives and CD-ROMs. The loaded computers are then distributed through resellers who typically sell the machines to their small-business customers.

Since they don’t pay license fees for the software, the resellers earn higher profit margins.

Microsoft says consumers should look for low prices, handwritten labels, photocopied manuals and missing certificates of authenticity as signs the products are likely pirated.

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Times Community News correspondent Harrison Sheppard in Orange County contributed to this report.