Microsoft is set to sue the electronic retailer Comet for illegally producing and selling 94,000 copies of Windows’ software CDs.

The US-based technolog giants Microsoft are pursuing legal action over counterfeit recovery discs for its Windows XP and Vista computing systems. The CDs were sold by the retail chain in 248 stores across the UK for £14.99 between 2008 and 2009. It was made available to people that were buying, or had previously bought, a computer form the shop.

David Finn, Microsoft's worldwide anti-piracy and anti-counterfeiting associate general counsel, said: “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.”

In addition, Microsoft states that Comet’s actions were wholly unnecessary, as the recovery it was selling would have been embedded on the computers that it had sold anyway – something PC manufacturers running Windows operating systems are obliged to provide.

And if any customer did want that recovery system on disc format they could have got it from the PC manufacturer for free, Microsoft said.

However, Comet has stated that it is going to fight the claims ‘vigorously’ as it believes that acts in the ‘best interests’ of its customers by supplying the recovery discs.

A spokeswoman for the electronics store said: “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.

“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. Accordingly, Comet is satisfied that it has a good defence to the claim and will defend its position vigorously.”

Following the announcement of the lawsuit yesterday, shares in Comet’s holding company Kesa Electricals fell by eight per cent.

Kesa – a French firm dual listed on the English FTSE and European Euronext stock exchanges – announced in November 2011 that it plans to ditch the loss making Comet and is in the process of signing over ownership to a merger and acquisitions specialist company.