Microsoft Corporation (Nasdaq: MSFT) has filed a NIS 5 million lawsuit against One1 Software Technologies Ltd. (TASE: ONE) subsidiary One Systems Integration Ltd. for allegedly distributing computers with forged authenticity labels for the Windows 7 Operating System. The lawsuit, filed with the Central District Court, says, "The respondents are grossly violating the claimant's rights, illegally enriching themselves at its expense."
In its statement of claim, Microsoft said that it used private detectives to investigate the case. It says, "The claimant has concrete information indicating that the transaction by the respondent seriously violates the rights of the claimant, and it appears that the respondent is systematically trampling the claimant's rights. The respondent sells computers with forged authenticity labels, in which pirated versions of the claimant's products are installed without a license."
One Systems Integration is the marketing arm of One Software. The authenticity labels are affixed to all computers in which Microsoft operating systems are installed under OEM agreements between Microsoft and hardware vendors.
Microsoft says that private investigators it hired found that the authenticity labels affixed to computers they bought allegedly for Lenovo were affixed on to HP computers.
If the court accepts Microsoft's demand, it will have a material financial effect on One Software. One Software's profits from hardware infrastructure products totaled NIS 11 million in the first half of 2012, and the company's total net profit was NIS 25 million.
One Software said in response, "Subsidiary One Integration Systems was surprised to receive the statement of claim, and it is studying the claims made in it. However, a preliminary perusal of the claim indicates that the subsidiary acted properly with regard to all claims made in the suit, and in any case the amount of the claim is not extreme and there appears to be no link between it and the amount of damages claimed by the claimant."
Published by Globes [online], Israel business news - www.globes-online.com - on November 11, 2012
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