The Microsoft Corp. filed suit Monday in U.S. Federal Court against A&S Electronics Inc. of Milpitas and owner Alan Z. Lin, alleging that A&S has illegally imported Microsoft software to the United States, unlawfully distributed that software, and illegally sold unauthorized product keys.

Microsoft lead legal counsel Bonnie MacNaughton said the suit is part of the corporation's "ongoing commitment to... protecting legitimate channel partners" in software distribution. Microsoft also filed similar suits Monday against plaintiffs from Canada, Egypt and the Netherlands.

A&S, which does business as TrustPrice.com, is located at 372 Turquoise St. Microsoft previously filed a federal copyright infringement lawsuit against A&S in 2002, alleging that A&S was distributing counterfeit software. A&S paid Microsoft $140,000 as part of the settlement in that case, according to Microsoft.

A&S also paid Microsoft an $8,400 settlement in response to a cease-and-desist letter from the corporation in 2001.

Microsoft alleges that legally licensed software sent overseas is being illegally redirected back to the United States, where it is sold unlawfully by distributors that include A&S.

"The problem has moved from the sale of counterfeit software to the sale of genuine software, but by companies that are unlicensed to sell our products," MacNaughton said. "So the customers are making an effort to find genuine software, and (A&S) is defrauding legitimate software seekers."

The suit also alleges that A&S is selling product activation keys, which MacNaughton said are not legal to sell separate from licensed software packages. MacNaughton claimed that licensed dealers of Microsoft software are being forced to slash prices to compete with illegal distributors. The suit filed Monday alleges that A&S is in violation of the Digital Millennium Copyright Act.

Lin said that he had no knowledge of whether the companies that sell him the licensed software are receiving the products from overseas, and claimed that the U.S. Constitution protects his business practices. "We obey the law down to the letter," Lin said. "We are a local company, and Microsoft is a very large company. When they don't like what we are doing as (a) reasonable business practice, then they (file suit)."