The lawsuit, filed in federal court in Dallas, alleges that Karen Dillard's College Prep company improperly used copyrighted College Board material to create its own test-prep curriculum.

It also alleges that company employees were given copies of the PSAT administered last October that were provided by a Plano, Texas, high school principal whose brother works at the company.

The company's owner countered that it was being bullied by the College Board, which she said had broken its promise not to sue if the company cooperated in an investigation and was trying to drive a test-prep competitor out of business.

The College Board's lawsuit said some students' scores could be canceled if -- though through no fault of their own -- they were allowed to practice on a test form that was later part of their scored exam.

The lawsuit, alleging copyright infringement, could bring attention to the burgeoning test-prep industry, which some critics contend gives well-off students an unfair advantage on entrance exams.

"We are outraged by the deceptive and unlawful tactics, knowingly practiced by KDCP," said Edna Johnson, senior vice president of the College Board, a not-for-profit membership group of high schools, colleges and educational groups.

"Most distressing to us is that students and their parents put their faith in this expensive prep process that was ultimately based on stealing the College Board's work product," she said.

Karen Dillard said the College Board approached her four months ago about questions she had distributed after buying them from the organization, thinking she could copy them for educational purposes.

She said she stopped distributing those questions after that. She denied she had ever used "live" tests -- exams the College Board has not officially "retired" and are not supposed to circulate.

According to the lawsuit, executive director Matthew Novotny obtained a copy of the PSAT administered October 17 from his brother, Michael Novotny, the principal of T.C. Jasper High School in Plano. The PSAT is generally taken by younger students as practice for the SAT, though it is used to select National Merit Scholarship recipients.

Dillard denied wrongdoing, saying the exam was sent to the company unsolicited and was never provided to students. She called any suggestion of unfairness absurd because PSAT exam books are released anyway.

"Their motivation to do this is their total monopoly in the test prep business," she said. "They want a total monopoly."

Michael Novotny, who is not named as a defendant, declined to comment.

The SAT is administered seven times per year, and questions and portions of the exam are sometimes reused. Test-site administrators are instructed to collect all test forms and lock them away.

The lawsuit also claims the company sold or tried to sell some copyrighted materials to another test-prep company and even to unspecified Texas school districts.

KDCP has campuses in Dallas, Plano and Colleyville, Texas, and according to the lawsuit charges as much as $2,299 for test prep services. Johnson said the College Board was approached by a whistle-blower inside the company, whom Paul Morico, an attorney for KDCP, called a "disgruntled employee."

Johnson said the College Board has canceled test scores of customers in the past when it has discovered that SAT tutors have access to improper materials.

However, "We have never come across a test prep company that appears to have based its entire SAT and PSAT curriculum on stolen materials," she said. The lawsuit alleges the company was well aware of the copyright infringements, referring to test material as the "PVA," which stood for "Pirated Version."

The allegations come as some express alarm about the rapidly expanding test-prep industry, which critics say capitalizes on the sometimes frantic anxiety students and parents feel about applying to college.

The College Board maintains that students don't necessarily need an expensive preparation course. It recommends they prepare by taking practice tests, some of which are available for free on its Web site.

However, it also advertises its own online courses for $69.95.

"They are my competition, and they're out to put me out of business," Dillard said.

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