Microsoft Sues Retailer Comet Over Fake Windows CDs [Updated]

Microsoft has sued UK big-box retailer Comet over allegedly producing and distributing fake Windows recovery CDs, claiming the store manufactured over 94,000 sets of discs that it passed off as legitimate to customers. The CDs – providing recovery and reinstallation tools for Windows XP and Vista – were sold to "unsuspecting" PC and laptop buyers in the company's stores, Microsoft says.

"As detailed in the complaint filed today, Comet produced and sold thousands of counterfeit Windows CDs to unsuspecting customers in the United Kingdom. Comet's actions were unfair to customers. We expect better from retailers of Microsoft products — and our customers deserve better, too" David Finn, associate general counsel, Worldwide Anti-Piracy and Anti-Counterfeiting, Microsoft

According to Microsoft's suit, Comet used a factory in Hampshire, UK, to produce the CDs. They were then offered as a paid upgrade to customers in the retailer's stores; usually Windows users are offered the opportunity to burn their own recovery media as part of the setup process.

Comet is currently owned by Kesa Electricals PLC, a French multinational based in Britain, though in November 2011 the company announced it would sell the retailer to equity firms Hailey Holdings and Hailey Acquisitions. Washing its hands of the loss-making chain will cost Kesa in the region of £50m ($78m).

Comet is yet to respond to the suit, though we've got a request in for more information from the company.

Update: Comet has given a statement to the Mirror:

"We note that proceedings have been issued by Microsoft Corporation against Comet relating to the creation of recovery discs by Comet on behalf of its customers. Comet has sought and received legal advice from leading counsel to support its view that the production of recovery discs did not infringe Microsoft's intellectual property.

Comet firmly believes that it acted in the very best interests of its customers. It believes its customers had been adversely affected by the decision to stop supplying recovery discs 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"