The software giant filed a complaint against Comet, accusing the retailer of illegally producing and selling copied Windows Vista and XP recovery discs.
The CDs were mass produced in a Hampshire factory, before being sold on to customers who purchased new computers from the retail chain.
The general counsel for anti-piracy at Microsoft, David Finn, accused Comet of producing and selling “thousands of counterfeit Windows CDs to unsuspecting customers in the United Kingdom.”
He told the BBC: “Comet’s actions were unfair to customers. We expect better from retailers of Microsoft products – and our customers deserve better, too.”
Comet argued that it was only producing the CDs as Microsoft stopped supplying them, and was merely providing a service to its customers.
The retailer issued a statement to say: “We note that proceedings have been issued by Microsoft Corporation against Comet relating to the creation of recovery discs by Comet on behalf of its customers.”
“Comet has sought and received legal advice from leading counsel to support its view that the production of recovery discs did not infringe Microsoft’s intellectual property.”
“Comet firmly believes that it acted in the very best interests of its customers. It believes its customers had been adversely affected by the decision to stop supplying recovery discs with each new Microsoft Operating System based computer.”