How does a company like Microsoft (NASDAQ: MSFT) keep huge numbers of people in countries like Indonesia and China from using pirated copies of its software? According to Craig Mundie, Microsoft chief research and strategy officer, for now, there is little the company can do. He told Reuters: "We are realistic in recognizing that we have to work diligently over periods, that are really a decade or two, to make real progress in a number of these environments."

That means that tens of million of copies of Windows could easily bring Redmond not a single dime. It also means that the company is relying on local officials to support anti-piracy laws. Policing such large populations really isn't possible.

But, Mundie may be acting a bit cute. In all likelihood, the answer for thwarting pirates has nothing to do with laws and police. Microsoft and other large software companies are almost certainly working diligently to make ripping and copying software much more difficult. They would at least have as a goal putting in a set of systems which would disable may of the software's features if copying were attempted.

If selling a version of Window in China yields $100 and there are, say 20 million copies of pirated versions distributed per year, it add up to real money, even for Microsoft. Odds are that the problem is solved through programming and local laws to prevent stealing be damned.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Have you seen those "educational" editions of Microsoft Corp. (NASDAQ: MSFT)'s software for sale at your favorite local retailer? These "Student" editions are deeply discounted and are meant for ... students and educational professionals. Some iffy retailers, though, buy these copies from nefarious sources who have purchased the software already at a discount and are pawning it off as the "regular" product to internet retailers. The victim becomes the end-customer, who receives a product without all the features present, since what they have bought is an "educational" edition.

This practice has gone on worldwide and Microsoft continually has policed these activities. In the latest, the software company said this week that it will be taking action against groups that sold copies of Windows and Office discounted for academic use to regular users. In general, more software piracy against Microsoft goes on outside the U.S. (China is a big offender), and this case is no different. Ole' Softie processed nine lawsuits and sent more than 50 letters threatening legal action against groups that operate internationally (some posing as academic resellers in Jordan). The suits were filed in the U.S., however.

The problem is that these "resellers" bought the licenses cheaper than normal versions of the software, which in turn sold the academic products to U.S. resellers (at a discount), who then made heftier margins charging customers full retail (non-academic) prices. Of course, end-customers are not educators (usually), so these unsuspecting consumers ended up with a piece of software that was not licensed to be used in the home (or office). PC software piracy has gotten better with the advent of license checks on PCs over the internet, but where there's illegitimate money to be made, someone will be making it, right?

In a scene reminiscent of what Microsoft has done since the early days of MS-DOS, the global software behemoth today unveiled 20 lawsuits targeted at sellers of counterfeit and fake software bearing the Microsoft name. This is nothing new, but attempts to safeguard Microsoft's intellectual property in recent years with technology such as product activation have been met with equally-swift pirating to the extent of lost billions per year for the software maker.

In addition to counterfeit software and selling illegal copies of Microsoft products like Windows and the Office productivity suite, Microsoft went after pirates who load certain Microsoft products directly on the hard drives of computers -- meaning there is no physical counterfeiting going on here. This does not matter, as much software these days has no physical media anyway. If a software pirate does not pay Microsoft for the license to install Microsoft software onto a customer's computer, that's illegal activity.

Although Microsoft has made great strides against the pirating of its software in recent years (the PacRim area being one of the most prevalent places for piracy), Ole' Softie may be able to recoup a few precious greenbacks from these just-announced lawsuits, while hopefully scaring the heebie-jeebies from potential software pirates who are probably doing the same things to this day. With hardware margins in the PC biz being so razor-thin, corners must be cut somewhere most likely. Just don't cross Microsoft.