Microsoft Sues Reseller for Bogus SQL Server Scam

Microsoft goes all out to nail a retailer it claims is playing bait-and-switch with customers' orders for its database software, providing unlicensed software and keeping the allegedly illegal profits.

Microsoft Corp. has sued an online software reseller for fraudulently selling pirated copies of its SQL Server 2008 database without telling customers that they wouldn't get legitimate licenses to use the software.

In a case filed Aug. 27 in the U.S. District Court in the District of Connecticut, Microsoft (NASDAQ: MSFT) claims that software e-tailer jigantic.com has been selling customers Software Assurance contracts, which are about half the price of the actual database software, as genuine SQL Server licenses and client access licenses (CALs).

The alleged perpetrators then pocket the difference between the cost of Software Assurance, which is a contract that enables a customer to get all versions of a piece of software released during the contract period, and a full-price licensed copy. However, Software Assurance does not come with a license for any software.

"Defendants have actively engaged in a fraudulent bait-and-switch scheme involving sales of Microsoft software licenses and Software Assurance. Defendants have switched and apparently are continuing to switch customer orders for Microsoft software licenses with less expensive Software Assurance which is not a license and creates no license rights," Microsoft's court filing said.

In July, Microsoft had an investigator in Connecticut order SQL Server 2008 Standard edition from Jigantic.com.

"Microsoft determined that Defendants did not forward the investigator's actual order for the SQL Server 2008 Standard with 5 CALs to Microsoft, but instead switched the order to less expensive Software Assurance without any software licenses; and distributed to the investigator (Defendants' customer) a disc containing Microsoft's copyrighted...software which the investigator had no license to install or use," the filing stated.

The owners of Jigantic.com also appear to have gone out of their way to hide their identities, according to Microsoft statements. The Las Vegas mailing address provided on the firm's website is a "virtual office" and the company is not a tenant there. Additionally, the owners also used a firm called Domains by Proxy to hide their identities, according to the filing.

Because it's difficult to identify who controls Jigantic.com, Microsoft also sued up to 20 "John Does" -- the currently unknown perpetrators of the fraud. Microsoft also sued for misuse of its copyrights, trademark violations and its products’ visual design.

Microsoft also asked for court costs along with triple damages, an injunction against Jigantic.com to stop the allegedly bogus sales, and an order to seize the company's illegal profits.

A call to Jigantic.com's corporate phone number (as listed on the company's site) for comment went unreturned at time of publication.

Since its founding, Microsoft has always been active in chasing down pirates and other scofflaws that sell counterfeit products or sell genuine software but pay no fees for its use.

Stuart J. Johnston is a contributing writer at InternetNews.com, the news service of Internet.com, the network for technology professionals. Follow him on Twitter @stuartj1000.

TAGS: Microsoft,software,piracy,lawsuit,fraud

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