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MEXICO CITY-J. Walter Thompson Mexico is negotiating a settlement with two of its software suppliers after a search by Mexican authorities turned up 250 copies of programs without documents authorizing their use.

Based on a complaint filed by Lotus Development Corp. and Aldus Corp., the federal attorney general's office searched JWT's office here March 17. Meanwhile, the agency and the software marketers are discussing a settlement, said Hector Gonzalez Berlanga, legal counsel to the Mexico branch of the Washington-based Business Software Alliance.

The investigation marks the first such seizure from an ad agency since the Mexican government began a serious effort about two years to combat piracy. The effort was in preparation for negotiations over the North American Free Trade Agreement.

To meet U.S. concerns about protecting intellectual property rights, the country overhauled the pertinent laws and conducted a series of highly publicized raids to show that it would enforce those measures.

"I have a strong feeling that [the agency and software companies] will come to an agreement," said Mr. Gonzalez Berlanga.

A settlement would halt further investigation, formal charges and possible prosecution.

"J. Walter Thompson is cooperating fully with its computer program suppliers to ensure that all software used in its offices and by staff has been acquired properly and is utilized in compliance with the manufacturers' stipulations," said a spokesman for the agency in New York.

Mr. Gonzalez Berlanga estimated that some 85% of all software use in Latin America is unauthorized.

"Anywhere we throw a stone, we'll break glass," he said.

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