The Register reports today that a US appeals court has temporarily rescued a small Utah software distributor from the legal clutches of Microsoft by throwing out an earlier decision that confirmed software piracy charges relating to trade in counterfeit Windows 98, Office and NT software. Judge Mary Beck Briscoe (Tenth Circuit Court of Appeals) wrote that too much doubt surrounds Microsoft's case against MBC Enterprises for the court to uphold the District Court decision granting Microsoft summary judgment. This, at least momentarily, halts the payment of damages to Microsoft and reverses an injunction against MBC that stopped it from selling Microsoft software. MBC allegedly bought the tainted software from a Texas company called Bantech and then sold equally tainted code to a Michigan company known as Mr. Software.
"The district court concluded defendants engaged in 'knowing infringement' of Microsoft's copyrights and trade marks. Based upon this conclusion, the court assessed a total of $990,000 in damages: $430,000 in statutory damages for copyright and trade mark infringement related to the Windows 98 software (damages on one copyright and four trade marks); $330,000 for infringement related to the Microsoft Office product (damages on one copyright and three trade marks); and $230,000 in statutory damages for infringement related to Windows NT (damages on one copyright and two trade marks) . . . In appeal, defendants contend the evidence relating to their intent was controverted and that the district court improperly found facts. We agree. As outlined in detail above, we conclude there are genuine issues of material fact concerning whether MBC actually sold any units of counterfeit Microsoft software".The court pointed to numerous items that could raise doubts about whether or not MBC knowingly purchased counterfeit software. In its decision, the court stateed that much of the evidence obtained by Microsoft could be seen as circumstantial. In addition, an MBC employee was able to convince the court that he took very special care to ensure that all software sold by the company is thoroughly verified.