The tech giant says the counterfeit discs were sold to Brits that purchased PCs and laptops with Windows XP and Windows Vista pre-loaded on them. Microsoft claims the discs were created at a factory in Hampsire and then in various Comet stores across the country.
"As detailed in the complaint filed today, Comet produced and sold thousands of counterfeit Windows CDs to unsuspecting customers in the United Kingdom," said David Finn, associate general counsel, Worldwide Anti-Piracy and Anti-Counterfeiting at Microsoft.
"Comet's actions were unfair to customers. We expect better from retailers of Microsoft products - and our customers deserve better, too."
Comet, which is currently owned by French retail company Kesa Electricals PLC, has yet to comment of the law suit. It is thought private equity firm OpCapita LLP plans to purchase the retailer later this year.
Microsoft advised PC owners concerned about the legitimacy of their software to visit its How to tell website.