Microsoft has filed a lawsuit against consumer electronics retailer Comet for allegedly creating and reselling more than 94,000 copies of counterfeit Windows software.
The suit claims Comet used a factory in Hampshire to produce the CDs containing unauthorised versions of Windows' recovery software.
These were sold to unwitting customers who purchased PCs running Windows Vista and XP from Comet stores across the UK.
In a statement, David Finn, associated general counsel of worldwide anti-piracy and anti-counterfeiting at Microsoft, said: "As detailed in the complaint filed today, Comet produced and sold thousands of counterfeit Windows CDs to unsuspecting customers in the UK.
"Comet's actions were unfair to customers. We expect better from retailers of Microsoft products – and our customers deserve better, too."
Microsoft's decision to take legal action against Comet is the latest blow for the ailing retailer, which was sold off to private equity house OpCapita for just £2 in November.
In a statement, Comet confirmed that it was preparing a legal response to Microsoft's claims.
"Comet has sought and received legal advice from a leading counsel to support its view that the production of recovery discs did not infringe Microsoft's intellectual property," said the statement.
"Comet firmly believes that it acted in the very best interests of its customers," it added.
Security firm set to become part of acquisitive Shearwater Group
Distributor merges three northern sites into one new hub in Warrington
Activist investor puts forward five director candidates as turmoil continues at security giant
Nima Green asks what is driving public cloud uptake in Germany