Microsoft agrees multi million dollar piracy settlement

Three-year worldwide investigation into the production and distribution of counterfeit server software by the MPO Group comes to a close

Microsoft has agreed a multi-million dollar settlement with disk replicator the MPO Group after a lengthy investigation into the production and distribution of counterfeit Microsoft server software.

As part of the settlement, MPO, which is headquartered in France, with subsidiaries in Ireland and Thailand, acknowledged that it had breached the disk replication agreements that it had in place with Microsoft after it was found to have unlawfully replicated thousands of Microsoft server software disks through a fake licensing agreement.

A team of Microsoft investigators found that the MPO Group’s Thai subsidiary had manufactured 20,000 counterfeit copies of Microsoft Exchange and SQL Server products in July 2003. The production of the disks resulted in copyright and trademark infringement and a breach of the Disk Replication Agreements between Microsoft and MPO.

However once MPO was made aware of the breach, it cooperated fully with Microsoft in a joint worldwide investigation that is still discovering counterfeit Microsoft software in the international distribution channel.

David Finn, associate general counsel, worldwide anti-piracy and anti-counterfeiting at Microsoft, said: “We are pleased to have settled this case with the MPO Group so quickly and look forward to an ongoing relationship with them.We appreciate the steps MPO has taken to tighten their security procedures to prevent a recurrence of this type of wholesale counterfeiting of Microsoft software, and to help track down all those responsible for distributing the counterfeits.”

Frank Holland, Microsoft vice president of operations, added, "Security, controls and compliance are absolutely vital in the supply chain of a company like Microsoft, where intellectual property is at the heart of our business."

Gerard Courcier, MPO industrial manager, said, "As France's largest independent replication plant, MPO values and recognises the rights of artists and creators of intellectual property. We are active members of the International Recording Media Association's Anti-Piracy Compliance Program, which helps manufacturers of prerecorded media protect the intellectual property rights of their customers. In this particular case we have worked together with Microsoft to track down those responsible for distributing the counterfeit software and have now taken steps to tighten our security procedures to prevent a recurrence of this type of event."

Piracy comes at a heavy price to the industry. The Business Software Alliance has estimated that 35 per cent of all PC software used worldwide is counterfeit or otherwise illegal, and a recent IDC Economic Impact Study revealed that if the piracy rate was lowered by 10 per cent over the next four years, it would create 2.4 million new jobs and $400bn in economic growth to the global economy.