Microsoft and MPO settle over counterfeiting row

19 Dec 2006

A disk replication company that has operations here in Ireland has agreed to a “multimillion euro” settlement with Microsoft after it manufactured 20,000 counterfeit copies of Microsoft Exchange and SQL Server in 2003.

It is understood that the illegal disks were manufactured in MPO Group’s Thailand operations.

Investigators and attorneys in Microsoft’s Worldwide Anti-Piracy team working in collaboration with law enforcement officials recovered some of the counterfeits in court-authorised searches and test purchases and traced them back to MPO facilities in Thailand.

Intellectual property-based industries are significant drivers of local economic growth. According to IDC, software, hardware and software-related services add US$1.7 trillion per year to the global economy, payment of US$900 billion in taxes and the creation of more than 11 million jobs.

Software counterfeiting, however, threatens the industry’s ability to maintain its significant contribution to the economies around the world.

For those outside the software industry it can be difficult to appreciate the scope and impact of one of the industry’s biggest problems: counterfeit software. The Business Software Alliance has estimated that 35pc of all PC software used worldwide is counterfeit or otherwise illegal.

A recent IDC Economic Impact Study asserts that if the piracy rate was lowered by 10 percentage points over the next four years, this would contribute 2.4 million new jobs and US$400bn in economic growth to the global economy.

“We are pleased to have settled this case with the MPO Group so quickly and look forward to an ongoing relationship with them,” said David Finn, associate general counsel, Worldwide Anti-Piracy and Anti-Counterfeiting at Microsoft.

“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,” Finn said.

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.”

By John Kennedy