Instead, Hutley said Microsoft would focus on shutting down resellers who deceive people by selling pirated versions of Windows and Office that look and feel like the genuine article. "Are we able to solve absolutely every problem? No ... there are some people who will always not want to pay for something and there are always people who will want to exploit," she said.

The Business Software Alliance, which represents software makers around the world, said a recent global piracy study by analyst firm IDC found 28 per cent of software in use in Australia was pirated. Microsoft has traditionally targeted bricks-and-mortar sellers of pirated software but it is now turning its focus to the internet. Staff at the company now regularly log on to eBay and make "trap purchases" of Microsoft Windows and Office products before analysing them to determine if they're genuine.

As part of that strategy - which began in July - Microsoft this month commenced legal action in the Federal Magistrates Court against three eBay sellers who pedalled pirated versions of Windows XP and Office 2003. "We are continuing to trawl [eBay] as we speak, we are looking at the power sellers ... and we will make trap purchases in order to secure the evidence," Hutley said.

In the past, Microsoft has targeted computer sellers operating out of physical shop fronts who offer to load a bonus copy of Office or Windows free of charge to tempt people into making a purchase. These are almost always counterfeit versions. Hutley said the practice was now rare following several blitzes by Microsoft. The company recently posed as a genuine customer and called up 400 Australian IT businesses and found only three of those offered to load pirated Microsoft software. The company has now filed proceedings against two of those in the Federal Magistrates Court after reaching a confidential settlement with the third last week.

Earlier this year Microsoft filed suits against 21 other resellers. Seven of them, all in NSW, have paid Microsoft damages. Hutley conceded the anti-piracy campaign would probably be interpreted as Microsoft crying poor and do little to deter people determined not to pay full price for its software.

But she urged pirates to consider the implications on local IT resellers who lose potential revenue to piracy. She claimed a 10 per cent reduction in piracy over the next four years would generate an additional 3929 Australian jobs in the IT channel. Hutley added that users of non-genuine versions of Windows would not be able to receive certain updates from Microsoft such as drivers. However, they would still receive critical updates such as security patches. Some pirated copies were also infected with malware or simply did not work.

"We want to protect our intellectual property - we are not Mother Teresa here - [but] we are trying to also say that every time someone has a bad experience with a counterfeit copy of Microsoft [software], that's a hit to our reputation," she said. Ray Johnson, manager of special operations with the Australian Federal Police, said intellectual property was just as valuable as physical property.

"Although it's a crime, fake goods seem to be widely acceptable, compared with stolen goods," he said.