Best Buy's 'Geek Squad' Accused of Pirating Software

AUSTIN, Texas – A Texas software company sued Best Buy Co. Inc. (BBY) in federal court on Tuesday, alleging that the nation's largest consumer electronics retailer was using unlicensed versions of its diagnostic equipment.

In response, a U.S. District Court granted Winternals Software LP's request for a temporary restraining order.

The lawsuit by Austin-based Winternals alleges employees of Best Buy's computer-repair subsidiary, Geek Squad Inc., have been using pirated versions of the software since talks on a commercial licensing agreement broke off.

The suit accuses Best Buy and its subsidiaries of copyright infringement, circumvention of copyright infringement systems and misappropriation of trade secrets.

"We are aware of the lawsuit filed today by Winternals. We are currently investigating the claims, but cannot comment further on pending litigation," Best Buy spokesman Jay Musolf said in an e-mail late Tuesday to The Associated Press.

According to the lawsuit, Winternals and Minnesota-based Best Buy began negotiating an agreement to use a Microsoft (MSFT) Windows-based systems recovery and data protection software last fall.

The lawsuit says Best Buy broke off negotiations in February, saying it was no longer interested in the commercial license.

Each software copy costs $1,200 and the two companies were negotiating a deal for bundled software worth several million dollars, said Winternals attorney David Weaver of Vinson & Elkins LP.

Winternals plans to seek an undetermined sum for damages, Weaver said.

A hearing has been set for May 12 in Austin.

Meanwhile, Best Buy has 20 days to provide all copies of the software, identify who used the software and where it was found, and explain how each copy was obtained or duplicated, according to the restraining order.