Overstock, a featured store on an MSN bargain shopping Web page, disclosed the lawsuit in a filing with the Securities and Exchange Commission.
According to the documents, Microsoft filed the suit in February in a federal court in California, alleging that Overstock "distributed counterfeit and otherwise unauthorized Microsoft software." The software giant is seeking damages and injunctive relief, according to the documents, which were filed Wednesday.
"We believe we have defenses to the allegations and intend to pursue them vigorously," Overstock said in the filing. Since the lawsuit is in the early stages, the company said, "we do not have sufficient information to assess the validity of the claims or the amount of potential damages."
Neither Microsoft nor Overstock could immediately be reached for comment.