The FBI is investigating the theft of the code and Microsoft officials said the company is cooperating with the investigation.
Microsoft's effort to defend its intellectual property is not as aggressive as the recording industry's legal campaign. Microsoft is asking Internet service providers to take "appropriate action" against violators as outlined in the providers' service agreements. ISP service agreements vary but many service providers will drop customers at their discretion.
The RIAA, on the other hand, subpoenaed dozens of service providers for the names of customers it suspects of being Internet music pirates. Verizon Communications Inc. resisted and a federal appeals court sided with the company but only after the RIAA had filed suit against 382 people, and the group has gone on to file even more suits under a different legal process.
Microsoft spokesman Tom Pilla would not rule out suing service providers whose users continue to violate the law. He declined to say how many Internet users were identified or the number of providers that received the e-mails.
"We are prepared to take and are taking all appropriate legal actions to protect our intellectual property," he said.
But not everyone agrees that threatening lawsuits will help Microsoft.
"The people you don't want to have access to that source code are not going to get it on Kazaa," said Eric Garland, chief executive of Big Champagne, an Atlanta-based company that tracks file-sharing network activity. "Newsgroups IRC, semi-professional closed networks -- they communicate among themselves in ways that a threatening letter to the ISPs will never begin to address."
Garland said that according to Big Champagne's analysis, there are approximately 50,000 people sharing the source code. Microsoft said people searching file-sharing networks for the source code will pop-up messages warning that downloading the code is illegal. Microsoft's Pilla declined to discuss the technology behind those messages.
Verizon Associate General Counsel Sarah Deutsch said Verizon is willing to work with the software giant, but must protect the privacy of its users.
"It would be easier for the ISP if they brought an action against a user rather than asking us to pass along an allegation," said Deutsch, Verizon's public voice in its tussle with the RIAA to protect its subscribers' identities. "To enforce a term of service based on something that's not on our network, there would need to be some pretty strong proof."
"If they sent us evidence that someone was trading the software code on our system, we would absolutely enforce our terms. But when it's not on our network it's a more amorphous issue," she added.
Deutsch said that Verizon has not received the letter. An official at America Online, the nation's largest ISP, declined to comment on whether the company received it. An Earthlink official said he did not know if the company received the letter. Earthlink is the nation's second-largest ISP.
Stewart Baker, a partner with the Washington law firm of Steptoe & Johnson, said that Microsoft is sensitive to this issue because as owner of the MSN service, it too is an Internet service provider.
"Microsoft is likely to be a little more reluctant to follow the RIAA's example because as an ISP they have an obligation to worry about the privacy of their subscribers," said Baker, who represents some of the nation's largest ISPs. "They know what it's like to be on the receiving end of such tactics and so I would expect them to think about it in a more balanced way than a recording studio would have to."
