The City of San Francisco is not happy with Microsoft over its Windows Phone 7 graffiti marketing campaign.

Winrumors revealed Microsoft’s Windows Phone 7 graffiti art marketing in New York earlier this week. The same chalk stencil art has now appeared on the streets of San Francisco and they’re not impressed. “There was no permit issued for this, because it’s not legal,” said Christine Falvey, director of communications for the city’s Department of Public Works, who spoke to Mission Local.

“As a first step, we generally contact the company and rely on them for a cleanup. If not, we can bill them for any cleanup costs the city incurs,” said Falvey.

Pavements around New York City have been chalked to advertise a Katy Perry concert that Microsoft is sponsoring as part of the U.S. Windows Phone 7 launch on November 8. People can win tickets by visiting AT&T stores in New York City. Microsoft is also supporting a Maroon 5 gig in San Francisco where it will be holding out free tickets at participating AT&T stores there.

Microsoft launched its Windows Phone 7 devices in the UK, Europe, Australia and New Zealand on October 21. The software giant is planning to launch devices on November 8 in the United States. AT&T confirmed earlier this week that it will not be taking pre-orders for Windows Phone 7 devices. Microsoft has refused to comment on carriers plans and neither company has offered a full explanation for the lack of pre-orders.

Microsoft’s latest marketing campaign is a reminder of the trouble of graffiti marketing. In 2002, Microsoft was fined $50 for sticking MSN butterflies on sidewalks, doorways, traffic signals, stop signs and planters. The marketing, at the time, was for Microsoft’s MSN 8 Internet service. Microsoft has not returned requests for comment on the marketing campaign.