This happens all the time with large and not so large companies, not just Microsoft. McDonalds has gone after a number of places (worldwide) who name their restaurants in any way that remotely sounds like theirs or their branded names (MickeyD's etc), even when it is completely clear that it has nothing to do with them. Whatever company makes Spam, the food product, is very crazed about the use of their brand name, especially after Monty Python gave it so much publicity for an 'alternate definition' lol. I read once that they employ people to search the web for unsanctioned use of their spam-can symbol.
It's sometimes silly and petty, but if the trademark laws side with them, that's what prevails. A lot of lawyers make a lot of $$ every year on the issue of brand names, trademarks & patents. Plus, the kid likely did this for the publicity to begin with. If he was an 8 year old, I would feel differently, but a 17 year old smart kid had to know it would come to this sooner than later.He'll probably put it on his college application.