Microsoft sues Comet over Windows 'counterfeits'

The software giant says the UK retailer made illegal copies of Windows Vista and XP recovery disks and sold them in its hundreds of stores across the country

Microsoft is suing the UK electrical retailer Comet for allegedly creating and selling more than 94,000 counterfeit Windows recovery CDs.

Comet store

Microsoft is suing UK retailer Comet over claims it sold thousands of counterfeit Windows recovery disks. Photo credit: Tomylees/Flickr

The software giant took its case to the UK High Court on Wednesday, claiming Comet had made money from sales of sets of knock-off Windows Vista and Windows XP recovery disks.

"As detailed in the complaint filed today, Comet produced and sold thousands of counterfeit Windows CDs to unsuspecting customers in the United Kingdom," Microsoft associate general counsel David Finn said in a statement.

According to Microsoft, Comet produced the fakes in a Hampshire factory and sold them across its outlets. The retailer, which is in the process of being sold by European parent group Kesa to investment firm OpCapita, has almost 250 high street and out-of-town stores across the UK.

Finn described the alleged counterfeiting as "unfair" to Comet's customers and said Microsoft expected better from its retailers. Microsoft has previously cracked down on smaller UK resellers that sold PCs with illegal copies of Windows preinstalled.

In response, Comet said it supplied buyers with the disks because manufacturers rarely bundle them with their PCs any more, and that it made them "on behalf of its customers".

"Comet firmly believes that it acted in the very best interests of its customers," the retailer said in a statement. "It believes its customers had been adversely affected by the decision to stop supplying recovery disks with each new Microsoft Operating System-based computer. Accordingly, Comet is satisfied that it has a good defence to the claim and will defend its position vigorously."

Windows recovery disks are used for fresh re-installations of the operating system, which comes preinstalled on almost every PC sold. However, PC manufacturers have in recent years increasingly moved away from bundling such disks with their computers, instead putting the software onto special hard drive partitions in the expectation that customers will make their own recovery disks.

Iain Connor, an intellectual property specialist at law firm Pinsent Masons, described the legal position as "narrowly drawn". He said anyone reproducing Microsoft's software on disks is clearly infringing on its copyright, but noted the law allows third parties to make copies on behalf of buyers as long as there is no extra economic benefit.

"Comet is trying to deliver a customer need, but if they are charging separately rather than just making back-up copies for their customers, they are depriving Microsoft of the opportunity to make money and they are cashing in when they shouldn't," Connor said in a statement.

"On the facts, Comet will struggle to mount the back-up copy defence by saying they are just protecting their customers' investment in the software, because the disks are being sold separately," he added. "If the disks had been bundled with the PC at the point of sale, I think they would be on much stronger ground. I think they are in trouble".

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