Pratibha Syntex Ltd, an Indian textile company, has agreed to pay a penalty of US$100,000 (or Rs 66 lakhs) to settle charges of using pirated software that gave it competitive advantages over American businesses.

The company is headquartered in Indore, Madhya Pradesh and exports cloths to top American companies including Walmart.

California Attorney General Kamala Harris said that Pratibha Syntex engaged in illegal business practices that placed California garment companies at a disadvantage, while hurting American software companies' ability to develop new and innovative products.

She added that businesses around the globe should be on notice that the state of California will hold them accountable for stealing intellectual property to unfairly undercut their competition.

It is for the first time that a state government has secured a legally enforceable judgement against an international company for such violations and hence this case is significant.

As per the settlement reached, which was filed in Los Angeles Superior Court and has been approved by a judge, the textile company has agreed to pay US$ 100,000 in restitution within 30 days.

Other terms of the landmark settlement prohibit Pratibha Syntex from using unlicensed software or reproducing any part of a copyrighted software program without the permission of the legitimate copyright holder, and further require the company to perform four complete audits of the software on their computers and fix any violations within 45 days.

Furthermore, Pratibha Syntex must draft an information technology policy statement regarding the use of licensed software and distribute this policy to all employees, it said.