Symantec Wins $18.6M in Claims Against Bogus Distributors

Symantec Corp. recently disclosed that it was awarded $18.6 million in damages from lawsuits brought against two distributors for selling imitation copies of the vendor’s security software.

The company said that the rulings were important because exposing the extent of software piracy helps to protect users and customers from purchasing counterfeit products.

“The size of these judgments reflects the scope of these two particular operations and the number of unsuspecting users that were put at risk for acquiring fraudulent software from these distributors,” said Joy Cartun, senior director of Symantec’s legal department.

U.S. District Courts in San Jose and Los Angeles, CA, respectively, ruled that V-Micro Inc., a New Jersey-based company, and Higher Model Computer LLC, a Connecticut-based organization, violated Symantec’s copyright and trademark by selling copies of the vendor’s software, including Norton SystemsWorks, Norton AntiVirus, Norton Ghost and pcAnywhere.

According to court records dated Feb. 4, 2009, U.S. District Judge Samuel Conti ordered V-Micro to pay $9.7 million in damages and directed the company to stop any activities related to duplicating and selling Symantec’s software.

On Feb. 18, 2009, court records show that U.S. District Judge Stephen V. Wilson ordered Higher Model to pay Symantec $8.9 million in damages and told the company to discontinue copying and selling Symantec’s products.

“While the judgments are significant, the more important point is that these businesses no longer pose a counterfeit software threat to Symantec’s customers,” Cartun said.

In court papers, Symantec said that Higher Model conducted illegal software sales in spite of a prior monetary judgment against it in 1999 from a copyright and trademark infringement lawsuit brought by Microsoft Corp.

“Despite these danger signals, [Higher Model] continued to purchase and sell thousands of counterfeit Symantec products and never contacted Symantec for assistance in determining whether the software that they purchased and sold was genuine or counterfeit,” the court filings said.

Symantec said in court papers that it first became aware of Higher Model’s counterfeit activities in 2006. At that time, Symantec cautioned Higher Model not to sell fraudulent products bearing the software maker’s name and asked it to buy the vendor’s products through authorized distributors, according to court filings.

Keeping courts busy

In Symantec’s claim against V-Micro, the vendor said that “inquiries from a number of consumers concerning purported Norton and Symantec software they had purchased from [V-Micro]” called its attention to the distributor’s counterfeit sales. In court papers, Symantec said that V-Micro advertised the software maker’s products “at prices well below the normal price for a retail product.”

The V-Micro and Higher Model lawsuits are among several concerning software piracy that Symantec has prevailed. Two years ago, the vendor filed civil suits in U.S. District Court against eight companies, claiming copyright and trademark infringement totaling $55 million in damages. Symantec reportedly collected some $20 million from favorable rulings in those lawsuits.

Last year, Symantec said that it won a $1 million judgment against Microsource International, a Houston-based reseller that pleaded guilty to charges of trademark infringement for selling pirated copies of the company’s software with a retail value of $10 million.

Cartun said that pursuing illicit software resellers was important because their practices often preyed on unsuspecting consumers.

“In many cases people turn over their financial information to disreputable businesses in exchange for products that don’t work and can make their computer more vulnerable to virus attacks and other online threats,” she said.

“Counterfeit software also is more likely to contain spyware, which after installation can steal personal and confidential information from someone’s computer without their knowledge,” Cartun added.

Symantec initially sued V-Micro and Higher Model in 2007. Court documents show that neither V-Micro nor Higher Model responded to Symantec’s complaints.

Attempts to reach V-Micro and Higher Model for comment were unsuccessful and the companies’ web sites were not operational.