When Microsoft's U.K. head of anti-piracy visited several computer stores in Glasgow earlier this week inquiring about piracy issues, some weren't especially glad to see her."Everybody is very, very surprised - Microsoft on their doorstep," said Michala Alexander at a press conference in London Thursday. She said the visits are part of a new program called Keep IT Real, that Microsoft announced on Thursday. The program\u00a0aims to cut pirate software by 5% over the next three years in the U.K.The house calls are an initial friendly approach that could lead to more severe legal measures against retailers - also known as system builders - that may be loading unlicensed copies of the Windows operating system\u00a0onto newly built computers. Microsoft estimates it loses up to $500,000 annually within the U.K. to piracy.That cost may be small beans to a software giant flush with billions in cash. However, the piracy undercuts legitimate retailers that put licensed software on machines, Microsoft officials said.Those businesses have asked Microsoft to do more, said Alistair Baker, managing director of Microsoft Ltd. and vice president of Microsoft Europe, Middle East and Africa.The campaign also calls for close ties with the U.K. Patent Office, the Trading Standards Institute and the British Chamber of Commerce. The Patent Office is strengthening its ties with law enforcement to combat an increasing problem with counterfeit goods and intrusion on intellectual property rights by sophisticated criminals, said Phil Lewis, head of enforcement for the Patent Office Enforcement Team.Lewis described a recent crackdown, "Operation Dawn," in London's Wembley Market. During the four-day operation, officials arrested the same man four times for possessing counterfeit software. "Every time, he had a new batch of stock," Lewis said.Producing bogus software is an easy, entry-level step into counterfeiting since the startup costs are low. However, counterfeit software - which can yield profits as lucrative as selling illegal drugs - can provide the funds for making other counterfeit goods that can cause physical harm to people, such as fake medicine, according to Alexander, who cited law enforcement figures.Microsoft is taking a street-side approach, and has two teams that will attempt 800 visits by June to computers sellers, Alexander said. As result of three years of similar work in Glasgow - labeled a "hot" area for piracy - 12 companies were investigated and resulted in payments of up to \u00a375,000 ($130,000) each to Microsoft, the company said.By working with eBay over the last six months, about 35,000 sales considered suspicious have been taken down, with more than 60% of those auctions being low-quality CDs, Alexander said.Microsoft is also going to consumers and educated them on how to spot fake software. At the Thursday conference, Alexander passed around two CDs of Microsoft software - one fake, one real. The two were nearly indistinguishable. Alexander then pointed out fine differences in the labels, with the true Microsoft product having an embedded strand noticeable by touch.The Microsoft Web site instructs users on how to detect fraudulent software.Users can also verify the legitimacy of their operating system\u00a0with the Windows Genuine Advantage program, via the Web site. Of the 7.1 million U.K. users who have checked their software, some 16. 7% - 1.1 million - found their copy to be illegal. Microsoft wants to reduce that figure to 11.7% by 2009.Microsoft has offered some sweeteners to get those users to buy a licensed copy, such as offering Windows Defender, formerly known as Windows AntiSpyware, for free to those with legitimate copies. Within the U.K., Microsoft is offering an anti-virus program for small businesses from CA.Those users can also buy an operating system\u00a0at a reduced price, Alexander said.