Gold Coast PC reseller, Magic Computers, has agreed to pay Microsoft $720,000 for copyright infringement.

The directors of Magic Computers holding company, Cross Link Marketing (CMG) Pty Ltd, agreed an out-of-court settlement after unlicensed software was loaded onto secondhand PCs.

The action stemmed from copyright infringements beginning in 1998, Microsoft senior corporate attorney, Vanessa Hutley said. It reoccurred four years later, when Magic was found to be engaged in hard-disk loading, she said.

Microsoft's attention was first drawn via hotline callers, she said. After discussions with Magic, an undertaking was received from company director, Kell Walker, that illegal copying would desist. However, further information received in 2004 led to Microsoft taking action, Hutley said.

"Our approach was to do an independent investigation, which included using forensic information on a PC purchased from the company," she explained.

Hutley said software piracy remained significantly higher in Australia than the UK, US or New Zealand markets, according to a recent Business Software Alliance study conducted in conjunction with IDC. The piracy rate was estimated at 32 per cent in Australia compared to 27 per cent in the UK, 23 per cent in New Zealand and 21 per cent in the US.