Clackmannanshire Council has paid£42,500 for the unlicensed use of 470 copies of Microsoft Office 97 in an out-of-court settlement.
The Business Software Alliance started legal proceedings on behalf of Microsoft last March.
Clackmannanshire bought the 470 'loose' licences from a supplier at a discounted price, but the agreements turned out to be invalid.
BSA programme manager Mike Newton said: 'This is a classic case of the deal being too good to be true and proves that councils are not immune to unscrupulous vendors. Councils should be setting a good example and should be vigilant when buying software.'
He added: 'Unfortunately, Clackmannanshire Council persistently refused to co-operate with either Microsoft or BSA to rectify the situation. As a result, BSA was left with no alternative but to instigate proceedings.'
The council has since spent more than£100,000 on 470 new licenses.
York broadens its horizons
City of York council has signed a£2.3m contract with Kingston Communications to supply libraries and schools with broadband internet access.
The three-year contract will benefit 14 libraries and 36 schools in a partnership with Learning Connect and the People's Network.
The first 30 sites will be enabled by the end of January.
Cash boost for teacher laptops
Teachers will be equipped with laptops over the next two years under an ICT for schools scheme announced by education secretary Estelle Morris.
The£100m investment doubles the previous announcement of investment in computers for teachers last March.
In practice it should mean around 100,000 more heads and teachers will be equipped with laptops, owned and maintained by the schools.
Some 50,000 teachers have already received PCs through various government initiatives.
National Association of Head Teachers general secretary David Hart welcomes the investment. He said: 'It is about half of the figure recommended by PricewaterhouseCoopers, but it is a real step in the right direction.'
Housing system joined up by SX3
Newham LBC has signed a£2m contract to support its housing maintenance work with an integrated system to provide a more efficient service.
The council says the Sx3 system, which goes live in April, should save nearly£300,000 a year by replacing a number of different and often incompatible systems.