Microsoft Sues E-Waste Harvesters of Phoenix, Claims Firm Sold Pirated Software

Computing giant Microsoft is suing a Phoenix e-waste recycling firm in federal court, claiming that the company has been selling unauthorized copies of its software.

Phoenix's E-Waste Harvesters and its principal, Earl Campbell, have repeatedly advertised and sold refurbished computers that contain pirated copies of XP, the aging Windows operating system, says a complaint filed in federal court last week.

Ironically, the company -- featured in a 2010 Business Journal article -- helps get rid of some of the untold tons of e-waste produced by Microsoft. E-Waste says its goal is to help the environment by reducing the amount of toxic computer waste that goes into landfills.

But good intentions won't pay Bill Gates' bills.

See May 9, 2013 update below.

E-Waste was warned back in June by Microsoft that it shouldn't sell computers with "infringing copies" of the computing giant's software installed, the lawsuit says.

"Nevertheless, in or about September 2012, Defendants distributed to an investigator a computer system with an unauthorized copy of Windows XP installed," the suit says. "This is not an isolated incident."

E-Waste has been "willfully blind" and reckless in ignoring copyrights, writes Microsoft's Phoenix laywer, Rusty Crandall.

Microsoft is playing hardball: It's asking a judge to place all of the profits E-Waste allegedly made by selling computers with the unauthorized software into a trust, which will be analyzed in order to return the "illegal" profits to Microsoft. And the company wants triple damages.

A woman at E-Waste Harvesters who answered the phone said Campbell was not in, and that she knew nothing of the lawsuit. We'll let you know if he calls back.

Click here to see the complaint by Microsoft..

UPDATE: May 9, 2013: Microsoft and E-Waste settle their lawsuit. Full terms of the settlement weren't available, but U.S. District Judge Murray Snow has approved a stipulation between the parties that places a permanent injunction against E-Waste that bars it from using Microsoft logos or software without authorization. Both sides are to pay their own court fees and attorneys' costs.

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Ray Stern has worked as a newspaper reporter in Arizona for more than two decades. He's won numerous awards for his reporting, including the Arizona Press Club's Don Bolles Award for Investigative Journalism.