Software distributor ITAC (UK) has started libel proceedings against Microsoft in the UK High Court after the software giant said it had traded with a "rogue distributor".
Two weeks ago, Microsoft launched a civil case against the Manchester-based company, accusing it of buying "parallel import" software from a Middle Eastern trader and seeking $7m in damages.
According to a report in Microscope magazine, ITAC (UK) is now attempting to sue Microsoft Corporation and Microsoft Limited for libel. ITAC (UK) is reported to have issued a statement saying that the dispute between ITAC (UK) and Microsoft was based on the issue of copyright, "but that allegation made in the media by Microsoft went way beyond what was due to be contested in court".
An ITAC employee confirmed these reports were accurate.
A Microsoft spokesperson said, "We can't issue any comment on the legal case at this time."