E-Scrap News Magazine: Microsoft claims processor breached destruction contract

Microsoft claims processor breached destruction contract

By Editorial Staff, E-Scrap News

September 24, 2015

An electronics recycling firm has been sued by Microsoft for allowing more than 70,000 Microsoft Office key cards to be re-sold on the black market.

In a lawsuit filed earlier this month in a Seattle district court, Microsoft accuses Global Electronic Recycling (GER), a Phoenix processor, of breaching the terms of a 2009 contract that explicitly called for the valuable activation cards to be destroyed.

"GER was required to destroy the product key cards and to implement and maintain security policies and procedures to secure them until the destruction was accomplished," the lawsuit states. "GER failed to comply with these contractual obligations."

According to the lawsuit, instead of destroying the cards "one or more GER employees" re-sold them on the black market. Law enforcement officials in Arizona informed Microsoft of an ongoing investigation into the illegal activity in September of 2014.

While the lawsuit does not identify the GER employees believed to be involved, instead referring to them as "John Does 1-10," it does claim the company's owners, Danny Kirkpatrick and Gary Kirkpatrick, "acted, at a minimum, with willful blindness to, or in reckless disregard of, Microsoft's rights."

Microsoft says the cards were worth "millions of dollars."

According to GER's website, the company is certified to the R2 environmental standard and is one of many for-profit and nonprofit entities registered as Microsoft authorized refurbishers.  "Protecting GER’s business, employees, clients and materials is critical to our effectiveness," the website reads.

GER could not be reached for comment.

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