A Texas test-preparation company accused of improperly using SAT and PSAT practice questions to help prepare its customers will pay $1 million to settle a lawsuit brought by the tests' owner, including a donation of $400,000 worth of tutoring for low-income high school students.

The College Board, which owns the SAT and PSAT exams and had sued Dallas-based Karen Dillard's College Prep in February for trademark violations, also said Tuesday it would accept the PSAT or SAT scores of students who worked with the company.

The College Board had previously suggested some scores might be canceled because the company had allowed students to practice on "live" test questions that had not been officially retired from use on actual exams, and which were not supposed to be circulating for practice.

At the time of the suit, company owner Karen Dillard and her attorney accused the College Board of using a copyright case to try to bully aside competitors for its own test-prep products.

But on Tuesday, the company issued a statement in Karen Dillard's name saying, "We recognize now that KDCP should have been more careful in handling College Board materials, and going forward KDCP is committed to respecting the College Board's intellectual property rights. This settlement affords us the opportunity to provide our services to students who might otherwise be unable to take our courses."

Laurence Bunin, senior vice president of operations for the College Board, said his organization "depends on the trust and confidence that high schools, colleges and students have in the integrity of our exams, including the SAT. That trust and confidence is jeopardized when tests are used in ways that are unauthorized and that put the test security at risk.

"We believe that the settlement shows that KDCP acted improperly in copying and distributing a secure SAT test form and other College Board materials," he said. "We have demonstrated that we cannot and will not tolerate such conduct, and that we will take all appropriate steps to protect our tests."

Copyright 2008 The Associated Press.