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Inadvertent pirates to pay Microsoft millions

Disc duplication company it hired is allegedly responsible for 20,000 unauthorized copies of Microsoft Exchange and SQL Server.

Microsoft has claimed an important victory in its battle against software piracy.

The company says it has secured a multimillion-dollar settlement against a disc-copying company allegedly responsible for 20,000 unauthorized copies of Microsoft Exchange and SQL Server.

Microsoft did not reveal how much money it recouped from MPO Group, which replicates DVDs and CDs in France, Spain, Thailand and Ireland. The settlement was reached following an investigation into the company's disc-manufacturing facility in Thailand.

The year-long probe revealed that the pirate was a third party claiming to have a license to replicate a certain number of discs annually. It also revealed that MPO's Thai subsidiary had incorrectly accepted that the third party's so-called license was genuine.

"In fact, no such license existed, and Microsoft does not license its software to be reproduced and distributed in this way," Microsoft said in a statement. Once the fraud was revealed, MPO fully cooperated with Microsoft and law enforcement officials, according to the Redmond, Wash.-based software giant.

"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," said Frank Holland, Microsoft vice president of operations.

Replication companies are often hired by software companies reluctant to take on the job of duplicating millions of discs themselves.

MPO is one of the largest companies of its type in Europe. Its Ireland operation manufactures only CDs, while the others make DVDs as well. According to the company's internal figures, it replicated 225 million DVDs and 295 million CDs in the year ending in August 2006. Seventy million CDs were replicated in Ireland.

Colin Barker of ZDNet UK reported from London.