Microsoft secured an out-of-court settlement this week in its unlicensed software infringement proceedings against Perth-based switch manufacturer Millennium Solutions, but the defendant is crying foul.
Responding to a widely distributed Microsoft statement announcing the software giant had received "damages paid for infringement of copyright", Millennium CEO Tony Mitchell claims he was bullied.
He admitted there was a possibility some illegal software may have been copied and loaded by staff acting alone and for personal use. However, Mitchell strongly refuted implications it was systematic or condoned by management.
Mitchell claims Microsoft had obtained information from a single disgruntled former employee he had been forced to dismiss. He feels the software giant then used "bully boy tactics" to gain a settlement.
He said the terms of the settlement included payment of damages which totalled "less than the cost of a cheap Korean car", and said he preferred to take the hit rather than pursue a defence.
Vanessa Hutley, Microsoft's corporate attorney, said she couldn't comment on Millennium's motivation for coming to a settlement, but added Millennium "was offered an opportunity to prove it had full licences in place and it didn't respond".
She denied the proceedings took place as a result of one phone call. Evidence presented to Microsoft showed discrepancies between the number of registered users and "business records", indicating some unlicensed usage. An informant signed an affidavit for the Federal Court of Australia which formed the basis of the allegations, she said.
"Microsoft would not have filed the proceedings if it was not confident the information it had received was secure," Hutley said. "The company [Millennium Solutions] was offered the opportunity to conduct its own internal audit and it did not respond satisfactorily.
"That is why we filed proceedings and a mutual settlement was reached by both parties."
Mitchell said that being pursued by "the legal might of Microsoft" forced him into "a commercial settlement". To then be lambasted in a nationally distributed press release has got his back up.
"We never admitted to have knowingly used illegal software," Mitchell said. "What happened to us could happen to any other user.
"By consent, the court ordered that there be no order as to costs. Microsoft had to pay their own costs in this little action which should tell you something."
Hutley explained Microsoft uses litigation as part of its ongoing education and anti-piracy program which targets both end users and channel partners. Millennium Solutions is not a system reseller and does not load OEM copies of software onto systems, she said, and it fell into the end-user category. It is the third company in five weeks to feel the wrath of Microsoft's legal moves.
"Microsoft has an active campaign to raise awareness in relation to unlicensed software and copyright infringement to protect its valuable intellectual property," Hutley said. "This is not just a program to bring a series of litigation. It is part of a platform to raise awareness and educate people about the impact of unlicensed software use and piracy."
Hutley pointed to the most recent Business Software Alliance (BSA) global survey which identified a 52 per cent piracy rate in Australia.
"In retail dollars, that represents $US150 million per year in Australia," she said. "That represents huge losses to legitimate resellers and retail channel businesses who are competing against people selling unlicensed software.
"It also represents losses to the economy in terms of missed genuine sales and, most importantly, to the local software developers. Everyone is facing that competition from unlicensed users and that revenue is lost."
Meanwhile, Mitchell is still not convinced the action taken against him was all kosher.
"I can assure you that anybody walking into our company would not be able to find one piece of unlicensed software on our 45 PCs. We don't do that."