How Microsoft Convinced Clueless Judges To Send A Man To Jail For Copying Software It Gives Out For Free

from the fucking-microsoft dept

This story should make you very, very angry. Last month we had the basic story of how Microsoft had helped to get a computer recycler sentenced to 15 months in jail for “counterfeiting” software that it gives away for free, and which is useless unless you have an official paid-for license from Microsoft. Let me repeat that: Microsoft helped put someone in jail for criminal infringement over software that anyone can get for free (here, go get it), and which won’t function unless you’ve paid Microsoft their due.

At issue are Windows recovery discs. Way back when, these were the discs that usually shipped with new computers in case you needed to reinstall Windows. You still needed your license to make them work, of course. Then people realized it was wasteful to ship all that — combined with enough broadband to make it easy enough to download and burn the files, and Microsoft then just made it easy to do that. But, that’s still complex enough, and Eric Lundgren had a solution. Lundgren is not some fly-by-night pirate. He’s spent years doing amazing things, recycling computers and helping them last longer. And he had an idea. It might be helpful to manufacture a bunch of these recovery discs and offer them to repair shops to help people who were unable to download the recovery discs themselves. He was being helpful.

But Microsoft insisted that he was not just infringing on their copyrights civilly, but criminally. When we left things last month, we were waiting for the 11th Circuit Appeals Court to consider Lundgren’s appeal — and astoundingly this week the judges, demonstrating near total ignorance of technology and the actual legal issues — rejected his appeal, which means Lundgren is going to jail for over a year for trying to do some good in the world, helping people get the exact same thing that Microsoft is offering for free, and which no one could use unless they’d already paid Microsoft its tax.

Lundgren was arrested as part of a government sting when the customs officials spotted the thousands of discs he’d manufactured and just assumed they were pirated. Here’s where Microsoft should have stepped in and said “this is all a mistake” and noted that Lundgren was actually doing a good thing and exactly what Microsoft should be encouraging. Instead, Microsoft sided with the US government and continues to do so to this day.

But beyond being pissed off at Microsoft, we should be pissed off at clueless judges: 11th Circuit Judges William Pryor, Beverly Martin and Lanier Anderson (average age: 66) rejected Lundgren’s appeal in 8 short pages of wrongness. It is depressing that vindictive, idiotic Microsoft combined with technically clueless judges can lead to a result that puts a good man in jail for doing nothing wrong. But that’s where we’re at.

The key issue in the appeal was over the actual “value” of the discs that Lundgren made. He argued, reasonably, that the value is zero. Again, Microsoft gives these away for free. Prosecutors, idiotically, initially argued they were worth the full price of Windows itself ($300). Eventually, the lower court went with a $25 fee after a government “expert” said each disc was worth that much:

To arrive at this amount, the PSR relied on evidence put forward by the government that “Microsoft had a certified computer refurbisher program that made genuine authorized reinstallation discs available to computer refurbishers for about $25,” and multiplying that amount by the 28,000 discs produced.

But that’s wrong. Microsoft sells discs with a license for $25 to repair shops. Again, the discs that Lundgren was offering had no license. You had to supply your own. But the judges (and the prosecutors) can’t seem to grasp this simple fact.

The district court did not err in concluding the “infringement amount” in this case was $700,000. First, the district court did not clearly err in concluding that the discs Lundgren created were, or appeared to a reasonably informed purchaser to be, substantially equivalent to legitimate discs containing Microsoft OS software…. That conclusion was supported by the sentencing hearing testimony, in which the government’s expert witness testified that the software on the disks created by Lundgren performed in a manner largely indistinguishable from the genuine versions created by Microsoft. While experts on both sides may have identified differences in functionality in the discs, the district court did not clearly err in finding them substantially equivalent.

Second, the district court reasonably concluded that the proper value of the infringed item was $25 per disc. The government’s expert testified that the lowest amount Microsoft charges buyers in the relevant market—the small registered computer refurbisher market—was $25 per disc. Although the defense expert testified that discs containing the relevant Microsoft OS software had little or no value when unaccompanied by a product key or license, the district court explicitly stated that it did not find that testimony to be credible. We afford deference to a district court’s credibility determinations, and here, no evidence suggests that the district court erred in concluding that the defense expert’s valuation was not worthy of credence.

Got that? No one seems to care that an expert pointed out that Lundgren’s discs, sans license, are effectively worthless. They dismiss that as not credible. Again, here was a situation where Microsoft should have said something. And it didn’t. It helped the prosecutors. And this week it issued this completely bullshit statement to the Washington Post:

Microsoft actively supports efforts to address e-waste and has worked with responsible e-recyclers to recycle more than 11 million kilograms of e-waste since 2006. Unlike most e-recyclers, Mr. Lundgren sought out counterfeit software which he disguised as legitimate and sold to other refurbishers. This counterfeit software exposes people who purchase recycled PCs to malware and other forms of cybercrime, which puts their security at risk and ultimately hurts the market for recycled products.

Look, that statement is pure hogwash. The software is not counterfeit. It’s legit. It’s the same thing that anyone can download from Microsoft for free. It didn’t expose anyone to malware or cybercrime, and Microsoft knows that.

So much of this comes down to a fundamental misunderstanding, driven by copyright maximalists of all stripes, including Microsoft. And it’s the idea that all of the following are equivalent: a copyright, a piece of software, a license, and “intellectual property.” Many people like to use all of those things indistinguishably. But they are different. The issue here is the difference between the software and the license. And Microsoft, prosecutors and the judges either do not understand this or just don’t care.

The best explanation of all of this comes from Devin Coldewey over at TechCrunch who dives deep into just how fucked up this situation is. Read Coldewey’s whole piece because it breaks down just how insane this ruling is piece by piece, but here’s one key part:

The “infringing” item is a disc. The “infringed” item is a license. The ones confusing the two aren’t purchasers but the judges in this case, with Microsoft’s help.

“[Defendants] cannot claim that Microsoft suffered minimal pecuniary injury,” wrote the judges in the ruling affirming the previous court’s sentencing. “Microsoft lost the sale of its software as a direct consequence of the defendants’ actions.”

Microsoft does not sell discs. It sells licenses.

Lundgren did not sell licenses. He sold discs.

These are two different things with different values and different circumstances.

I don’t know how I can make this any more clear. Right now a man is going to prison for 15 months because these judges didn’t understand basic concepts of the modern software ecosystem. Fifteen months! In prison!

Coldewey also hits Microsoft hard over all of this:

Microsoft cannot claim that it was merely a victim or bystander here. It has worked with the FBI and prosecutors the whole time pursuing criminal charges for which the defendant could face years in prison. And as you can see, those charges are wildly overstated and produced a sentence far more serious than Lundgren’s actual crime warranted.

The company could at any point have changed its testimony to reflect the facts of the matter. It could have corrected the judges that the infringing and infringed items are strictly speaking completely different things, a fact it knows and understands, since it sells one for hundreds and gives the other away. It could have cautioned the prosecution that copyright law in this case produces a punishment completely out of proportion with the crime, or pursued a civil case on separate lines.

This case has been ongoing for years and Microsoft has supported it from start to finish

There are lots of reasons to hate on Microsoft, but this one is one of the most sickening examples I’ve seen. Anyone at Microsoft who had anything to do with this should be ashamed.

But, of course, this is the world that companies like Microsoft (and the various Hollywood entities) have pushed for for years. They blur the lines between “license” and “content” and “copyright” and then use it as far as they can push it. And who cares if someone who is actually doing good in the world has his life destroyed?

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Comments on “How Microsoft Convinced Clueless Judges To Send A Man To Jail For Copying Software It Gives Out For Free”

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Anon says:

Come on guys.

The discs he was selling had the Microsoft / Dell logos, and appeared to be exact copies of the official recovery discs, even down to the copyright notices and bar codes.

If he’d just labeled the discs “some guy’s recovery disc, not associated with Microsoft” I think he’d be fine. Instead his duplicates were nearly perfect.

That Anonymous Coward (profile) says:

Re: Re:

‘nearly perfect’
they could have been exactly perfect… please explain how it matters?

The argument the Judge heard ‘ in his head’ was that using these discs was stealing income from MS.

How does taking something made available for free online & including it with a refurbished computer with a valid COA that was attached to the machine when made originally steal anything.

He did not include any of the hacks to illegally activate windows, he did not mix and match COAs.

Huge fine & jail time…. b/c he tried to make things easier for people in his line of work refurbishing computers.
Didn’t steal COAs, just wanted to provide the discs the machines did & should have had in the first place.

BernardoVerda (profile) says:

Re: Re: Re:

Microsoft has a history of going out of its way to hinder and take to court people and charitable organizations that legitimately (and legally) refurbish computers, instead of buying new computers — with new licenses.

This kind of action was one of the major reasons I switched to Linux — I prefer to give my money to more ethical vendors.

Ninja (profile) says:

Re: Re:

Sure, he wanted to make it as close to the original thing as possible. Is it some sort of infringement? Possibly. Is it worth jail time? Definitely no. At best apply a fine and move on. I mean, punishment should fit the perceived damages the person caused. The worst he did was maybe mislead people into thinking they were official discs. No financial gain, nothing. So why jail time?

Cdaragorn (profile) says:

Re: Re: Re:

“Is it some sort of infringement? Possibly.”

Wrong. The people he gave the discs to ALREADY OWN THEIR OWN COPY OF THE SOFTWARE. Therefore it is blatantly permitted copying and cannot be ruled as infringement.

And to be blunt, they were official discs. The software on them was an exact copy of MS’s official software provided in the exact same way MS provides it: for free to anyone that wants to download it.

Anonymous Coward says:

Re: Re: Re: Re:

Wrong. The people he gave the discs to ALREADY OWN THEIR OWN COPY OF THE SOFTWARE. Therefore it is blatantly permitted copying and cannot be ruled as infringement.

That’s common sense, which is not how copyright law works. You have no right to copy something just because you own it; copying it for someone else who owns it is even worse legally—less likely to be ruled fair use.

You should never pay for something you don’t have a right to copy, but most people do exactly that.

Brandon says:

Re: Re: Re: Re:

This is false. Microsoft did NOT have WinXP or Win7 restore images available for free download at the time. Microsoft DOES NOT and never has made these available without proof of license. Go try it yourself.

This guy sold thousands and thousands of discs at various prices (e.g. $3.50 a piece for a $28,000 sale), and told his partner to sell them to “less discerning buyers” who wouldn’t know the difference and would think they were the real thing. He told his partner how to bypass customs checks, and to lie to customs officials. He had no way of knowing whether buyers had valid licenses, or how they would use the discs. He clearly described how there was a market for these and how it would give them income “for years” because they could undercut the legitimate alternatives.

The idea that Microsoft did anything wrong here is a fantasy made up by people who want to criticize Microsoft for anything they can, facts be damned.

Anonymous Coward says:

Re: Re: Re:2 Re:

‘This is false. Microsoft did NOT have WinXP or Win7 restore images available for free download at the time. Microsoft DOES NOT and never has made these available without proof of license. Go try it yourself.’

The Windows 7 ISO images Microsoft made available on Digital River weren’t restore images?

pc4 says:

Re: Re: Civil vs Criminal offenses


whatever were the facts of this business dispute, it was a gross miscarriage of justice to prosecute this minor issue as a “criminal” (jail time) case.

But that’s the overwhelming trend as the American police state matures — criminalize everything. Gotta be tough to kepp the serfs in line.

That the U.S. justice system has no connection with justice… is not Microsoft’s doing. Guess where the fault actually is ?

That Anonymous Coward (profile) says:

“Lundgren claims that the assistant U.S. attorney on the case told him, “Microsoft wants your head on a platter and I’m going to give it to them.””

“the district court explicitly stated that it did not find that testimony to be credible”

IIRC: The Judge didn’t understand words & concepts so the testimony was just blown off in its entirety.

How is this Justice, well I don’t understand the voodoo you are talking because I am older than dirt so your testimony is ignored, and the nice M$ expert who brought me cartoons of you stealing billions of dollars are all I need to understand.

Yes the discs were the same but there was a HUGE difference.
You could put either sides discs in a machine & if you don’t have a valid COA on the machine… you have a shiny coaster not an operating system.

*blinks & twitches*
O.M.G. do you think, somewhere inside M$ there is a lawyer who okayed this… because M$ wants to get rid of all the machines running anything before 10??
It sounds stupid enough, I can totally seeing a lawyer doing this… we’ll teach those bastards to use 10 and nothing else!!!!!!!!!! MUHAHAHAAHAHAHAHAA….
Mind you this wasn’t what was intended, but hey we invited the Feds to the party so we need to go through with it, we aren’t the RIAA who get them to arrest people on charges & never come up with any evidence to support our claims.

Anonymous Coward says:

Re: Re: Re:2 Re:

Does that also mean you cannot ask a friend to download and burn a copy for you when your only computer blue screens? Also, does that mean a repair shop cannot use their own restore disk to repair other peoples computers?

Different things are different. I have an implied license to walk across the sidewalk in front of your house: that doesn’t mean I can start selling tours of your yard.

But you can sell tours of a town visiting all areas that are open to the public.

Anonymous Coward says:

Re: Re: Re:3 Re:

Does that also mean you cannot ask a friend to download and burn a copy for you when your only computer blue screens?

You can ask, but you’ll be asking them to violate the copyright—unless MS have been nice enough to grant a written license allowing it.

Also, does that mean a repair shop cannot use their own restore disk to repair other peoples computers?

You’d have to read the license. It might not be allowed; common sense doesn’t apply here.

Anonymous Coward says:

Re: Re: Re:5 Re:

Can you cite the part of the license which bolsters your argument that having a friend burn a copy for you is a Copyright violation?

Can you give me a link to the license? I can’t find shit on their site. For now, I’ll guess "all rights reserved" is the relevant quote… but not even. Unless they explicitly give permission, it would be disallowed, unless there’s a fair use argument (or perhaps if that person can be considered your agent).

Relevant law is here and you might be able to use this exception: "Notwithstanding the provisions of section 106, it is not an infringement for the owner of a copy of a computer program to make or authorize the making of another copy or adaptation of that computer program provided: (1) that such a new copy or adaptation is created as an essential step in the utilization of the computer program in conjunction with a machine and that it is used in no other manner".

So, if your computer’s busted, you can say it’s "essential" you authorize the making of a copy. Maybe a court will agree.

That One Guy (profile) says:

Re: Re: Re:4 "Why would I respect THAT?"

You can ask, but you’ll be asking them to violate the copyright—unless MS have been nice enough to grant a written license allowing it.

See, here’s the funny thing: It’s entirely possible that you’re right. That something you can do, completely legally, becomes illegal as soon as you ask someone else to do it. Same action, same result, the only difference is that someone else is doing it for you.

However, the punchline to the joke that is copyright is that if that is legally sound, it’s also yet another example of why people would likely just ignore the law entirely, because it’s completely insane.

That sort of thing is why I’ve believed for years now that the only people who respect copyright law are those that have a financial stake in it being so laughably broken, or who don’t know anything about it, because once you start learning just how utterly crazy it is(‘share a song with a friend because you think they might like it? You better believe that’s a crime’) it’s impossible to retain any respect for it.

The more extreme maximalists of various sorts ratchet up the law(and it only ever goes up), the more people are going to violate it, oftentimes completely unintentionally, simply because it’s increasingly effectively impossible not to, and informing the public of this is not going to get them to respect the law, but ignore it.

Anonymous Coward says:

Re: Re: Re: Re:

That’s not what this case is about. The guy isn’t in jail because he paid somebody to copy disks for him.

Microsoft owns all the rights for Windows. Just because they grant permission to somebody to make a copy of that material doesn’t mean they are also granting permission to redistribute.

If a photographer posts a photo online, do you think it would be okay for me to print copies of it and sell them?

Anonymous Coward says:

Re: Re: Re:2 Re:

If a photographer posts a photo online, do you think it would be okay for me to print copies of it and sell them?

Not the same thing, as the buyer is permitted to own copies of the recovery disk, and the recovery disk is only useful to people who have already paid for a windows license.

Anonymous Coward says:

Re: Re: Re:5 Re:

I totally see the difference. You were the one arguing that selling a copy of something that is available for free online shouldn’t be copyright infringement.

I don’t see a difference between me saving an image file to a CD and selling it vs saving software files to a CD and selling that. They are both copyrighted materials and subject to the same laws.

Anonymous Coward says:

Re: Re: Re:6 Re:

Easy. You can’t view the image you saved to the CD till you have the key. He didn’t sell keys. You bought the disk without a key, you have a used disk that would only work for 30 days and then lock itself down till your provided a key. If the computer you had didn’t have the windows holographic key somewhere on the system then the disk was nearly worthless. Personally, I would have paid the $.25 he was selling the disk for rather then go through the whole process from Microsoft. Especially if I had to burn it instead of installing via USB. I wouldn’t have been paying him for the the recovery disk. I would have been paying him for all the time I didn’t have to waste. Most people don’t even know you are allowed to do that because Microsoft wants people to pay for a brand new license. It is obvious at the price he was selling the discs for that he couldn’t have made much profit. I would even believe the he took a bit of a loss. I charge people for making recovery disks for them but it is based on my hourly tech rate, not for the disc and it is only if they want one or tossed the old one. Most newer system contain a recovery partition now so I haven’t done it in 7-8 years.

Anonymous Coward says:

Re: Re: Re:10 Re:

Just remember that the copyrighted material is free. I don’t believe $.25 a copy is enough to cover the costs of the CDs to the computers he recycles and other recyclers he is sending them too. Sure, he shouldn’t have attempted a copy of the logo but he is trying to prevent 1000s of systems from going into the landfill. Maybe he should just take a few dump trucks and send the computers back to Microsoft’s campus since they can make that much money from them.

Richard (profile) says:

Re: Re: Re:4 Re:

Microsoft don’t just allow you to view online – they allow you to make a copy.
BY implication they also allow you to make a copy for someone else (otherwise children and disabled people can’t have access).

By implication they also allow you to charge a fee for doing so (otherwise disabled peo0ple can’t employ professional help.)
So everything he did is alllowed by Microsoft.

Uriel-238 (profile) says:

Re: Re: Re:5 Can the reverse be implied?

I bet this is not the first time Microsoft screwed someone for doing something legal with their software.

Maybe a published journalist can make a case that, based on Microsft history, its legal department will ruin lives for its pleasure just for daring to use its software in some manner not perfectly proscribed.

Use Microsoft software, and Microsoft will eventually own your business and annihilate you.

I don’t know if that data is there. Microsoft is already reputed to be anti-competitive in so many other ways (especially when their products fail to be actually competitive).

PaulT (profile) says:

Re: Re: Re:2 Re:

“Just because they grant permission to somebody to make a copy of that material doesn’t mean they are also granting permission to redistribute. “

When the software is unaltered from the version they give away for free and requires a purchased licence to operate, why make the distinction? It costs them nothing and loses them nothing.

“If a photographer posts a photo online, do you think it would be okay for me to print copies of it and sell them?”

No, because you are then potentially depriving the photographer of income for selling his own prints. These discs, on the other hand, lose Microsoft exactly $0 because someone wishing to use them would have to also purchase a valid licence from Microsoft.

It’s really not a hard concept to understand. Microsoft lost nothing, and in fact may have potentially made money out of the deal (a person whose PC couldn’t be repaired due to not having one of these discs may have opted to use Linux or a Mac instead of a Windows computer for their next purchase, while the discs would have kept them on Windows).

Anonymous Coward says:

Re: Re: Re:3 Re:

So, if I copy a photo from a freely accessible website and burn it to a CD and sell those CDs, it’s wrong because I might be depriving the photographer of income.

But if I copy software to a CD and sell those CDs it’s different? Software isn’t treated differently than other copyrighted works under the law, is it? It might require a license to use the software, but the software itself is still protected and Microsoft alone has the right to say who can make copies and who can sell copies.

Also Microsoft has a program for refurbishers. If you are refurbishing PCs, you can buy Windows for $25. By Lundgren’s own admission, he was selling the disks for refurbished computers. I’m pretty sure that’s the number the judge used to calculate damages.

Richard (profile) says:

Re: Re: Re:4 Re:

So, if I copy a photo from a freely accessible website and burn it to a CD and sell those CDs, it’s wrong because I might be depriving the photographer of income.

But if I copy software to a CD and sell those CDs it’s different?

Wrong analogy.

Here is the corrected version.

IF I copy an encrypted photo from a freely accessible website and make copies of it and then sell them – but in order to view those copies the buyers have to pay the photographer for the encryption key – then that is exactly analogous to the microsoft situation.

You appear to be being deliberately stupid.

Anonymous Coward says:

Re: Re: Re:8 Re:

Dude is in jail for making copies. You’re saying Microsoft permitted him to make a copy. So surely he shouldn’t be in jail for making a copy he was allowed to make. You’re welcome to provide some other theory, but you just talked your justification for the jail-time into being a logical impossibility.

Anonymous Coward says:

Re: Re: Re:2 Re:

Your photo analogy simply doesn’t work here…

Recovery discs work on the idea that you are essentially repairing a system’s operating system to the state the system was in before it needed to be repaired.

Note the word before. It implies that there was a working system to begin with.

This is why your photo analogy doesn’t work. When you download a photographer’s photo from online, there is no before as you did not already have it.

Anonymous Coward says:

Re: Re: Re:3 Re:

The guy who was selling the disks didn’t have any PCs so there was no before for him either.

He’s in trouble for infringing somebody’s copyright. He clearly did that, right? He wasn’t able to defend that infringement, so he was found guilty.

It’s ridiculous that he is going to prison though.

Anonymous Coward says:

Re: Re: Re:5 Re:

My number one assertion, and it’s the most important one, is that he infringed on Microsoft’s copyright for the software. He’s never denied it and it’s obviously true.

So then the only part that is disputable is if the infringement falls within one of the exception categories. It’s certainly arguable both ways.

If he were selling the copies at cost and not earning a profit, he probably wouldn’t have been prosecuted for copyright infringement. I would bet that he still would have been prosecuted for something though (probably related to trademark and counterfeiting).

BernardoVerda (profile) says:

Re: Re:

Mikerosoft hates refurbishers — especially if they’re charitable organizations that refurbish computer for people who can’t afford new computers, instead of buying a new computer or at least a new license.

Microsoft has gone to court to prevent legitimate charities from passing on donated computers with still legitimately licensed, original operating systems, instead of buying new licenses.

SBW says:

As a lawyer, you missed the mathematical implication of these rulings: if a disc without a license has the same value as a disc with a license, then the value of a Windows license must be zero.

This judicial determination has been affirmed by the appeals court.

I hope the next actual pirate Microsoft attempts to prosecute cites this precedent.

Vidiot (profile) says:

Not to pick nits, but it’s not really "How Microsoft Convinced Clueless Judges…"; we don’t get a peek at a brilliant MS strategy that delivered injustice. Instead, it’s about clueless judges, a bogus expert, and plenty of misrepresentation; these are fairly standard fare for an infringement case like this. If we could really get to the how part, maybe there would be lessons as to how to defend/protect against this idiocy. (Although skipping the Microsoft/Dell logos would have been a good start.)

Anonymous Anonymous Coward (profile) says:

Re: Re:

Microsoft ‘convinced the clueless judge’ by withholding the fact that the discs did not contain licenses and are useless without said licenses, which they certainly knew. Microsoft should have told the truth, the whole truth, but they didn’t. They went along with the fiction the prosecutor created. Maybe they helped the prosecutor create that fiction, but that is only conjecture.

Anonymous Coward says:

Lungdren put down an $80,000 order in China for them to mass-produce the recovery discs with imagery and labels to attempt to make them look like the real thing that Microsoft and Dell were selling/still sell for $25, and likely intended to sell them as if they were the genuine article. Yes, the software is free to download. But the discs were counterfeit material, plain and simple. Somebody like Lungdren should have known that this was a stupid idea. I’m not sure what’s so hard to understand about why he got sent to jail; he was committing counterfeit at a commercial level.

Anonymous Coward says:

Re: Re: Re:

The license/lack of license isn’t the subject I was addressing with my comment. With or without the license, Lundgren still sought to mass-produce the discs with labels and iconography that would make them look like official discs that got approval from Microsoft and Dell, which they didn’t. Companies don’t like it when people make unauthorized mass-produced versions of things that they sell, especially when fake labels are used to make them look like the real deal. That’s counterfeiting at a commercial scale, and I’m pretty sure that’s illegal.

Now let’s actually talk about the license issue. Microsoft/Dell’s recovery disks had the licenses. Lundgren’s did not. So not only is Lundgren making counterfeit recovery discs, he’s making them look like something they are (official discs with licenses) when they’re not. What happens if somebody tries to use one of these discs, it doesn’t work, and then they try to sue Microsoft/Dell? No company wants to deal with the legal/liability headaches associated with bootleg crap that may or may not work.

As a person who owns/owned a computer recycling company, Lundgren’s team must have had to from time to time deal with bootleg software that didn’t work. What would possess him to potentially introduce more of that into the world??

Anonymous Anonymous Coward (profile) says:

Re: Re: Re: Re:

If the end user downloaded the software from Microsoft, as Microsoft allows, and it didn’t work it would be exactly the same result as your bootleg software story.

I do agree that Lundgren made a mistake by including the Microsoft/Dell logos on his disks, though I do not think that inclusion is worth 15 months in jail. The content of the disk is freely available, and (at least so far as I can tell from the article) exactly the same as what can be downloaded from Microsoft. It would be more like he provided a service to someone who did not have an internet connection, and needed that free software.

Anonymous Coward says:

Re: Re: Re:2 Re:

But it’s not exactly the same. As the article says, Lundgren’s version doesn’t include the license, while Microsoft’s does.

Then there’s another thing. Yes, the software is free to download. Yes, Lundgren would be providing a service to people without an Internet connection who needed the software. But Dell and Microsoft also sell the discs as a service to people. His copied discs that used company markings would be in competing in the same market with Dell/Microsoft’s own recovery discs. In the grand scheme of this whole case, the free recovery download that you can get isn’t important, but rather the service that is provided by selling discs with the recovery software on it. What Lundgren tried to do is illegal, someone who owns a business that deals with software like that should’ve known that it’s illegal, and I’m not going to lose any sleep over him having to serve jail time.

The Wanderer (profile) says:

Re: Re: Re:3 Re:

Do you have to have a license in order to be able to download the software from Microsoft?

If not, then it’s still entirely possible to get the software from Microsoft, and be unable to use it because you don’t have a license – exactly as if you had gotten the software from Lundgren, except that Lundgren would have given you the disc (and charged you for it) whereas Microsoft just gives you the ISO (and doesn’t charge you).

The Wanderer (profile) says:

Re: Re: Re:5 Re:

Are you sure?

I went to
and was able to get a link for a direct ISO download for Windows 10 build 1709 (the current latest), from a machine running Linux, without even being prompted for any license-related information. It’s downloading as I speak.

That Anonymous Coward (profile) says:

Re: Re:

So you totally missed the part until the broker the feds busted made an offer to buy them at a price required to ensure a conviction, he had planned to make the discs available for $.25.

These discs were meant for refurbishers to be included with a system that had a legal license bound to it.

As someone who had to pay $60 to get recovery media (that didn’t work right) and left me with an expensive paperweight.

I have a printer & media that I can make custom discs, if I make a pretty label for it, is my disc containing every operating system suddenly more illegal? The disc exists because I get people who never got recovery media, never made it from the cost cutting crap software it shipped with (I know this one, it never verified the discs it made with the single time the program would work so I thought I had recovery media until I needed it), used the discs as a coaster, the discs got thrown out at some point….
If they don’t have a working computer, I can’t get them the image from anywhere & prepare it to run the tools to repair their system.
But hey I’ve had enough of these events where they aren’t even sure what version they were using, that I have a disc that covers the entire MS library.
I don’t hack COAs or activation, they are legally entitled to the software I just made it easier to repair it.

Toom1275 (profile) says:

Re: Re: Re:

As someone who had to pay $60 to get recovery media (that didn’t work right) and left me with an expensive paperweight.

My brother’s been upgrading his PC recently. Unfortunately, his new processor wasn’t compatible with 7, so he had to "upgrade" to windows 10. He went to a retail store and bought a full licenced Windows 10 install media package. Unfortunately for him, the USB drive in the pack was a dud – it didn’t function. Luckily, I had a Windows 10 free install download on one of my own USB drives. That one he was able to install Windows 10 off of. At least the license key he had just purchased worked to register his system.

So if I hadn’t (gasp!) shared my downloaded copy of the free Windows installer I put on a disk, then my brother’s only hope would be if the store accepted returns of opened software.

Uriel-238 (profile) says:

Re: Re: Re: This is the beginning of most forms of piracy

(In this case, piracy is doing crap without a license, not raiding ships on the high seas)

The legit way to use a thing is poorly implemented or obstructed by circumstances not considered by the licensers. A friend says hey, use mine to get past this jam and sharing begins.

Sometimes the jam is I really need to hear this song and the friend says Here, record it off my Longplay onto your 8-track which has been in a piracy grayzone ever since.

Microsoft’s solution presumed everyone would have a friend with a computer, a good internet connection and a DVD ROM burner. It turns out in much of The United States (and the world) it does not.

The rest of the world responded by creating a hack Windows Loader designed not by backroom crackers but professional engineers, because entire businesses needed to streamline their install process. Microsoft has been trying to fight it back with litigation ever since.

bshock says:

I’d be a bit more angry, but then an admitted criminal seized the presidency of the United States and began installing other criminals into Cabinet posts and judgeships. President Criminal continues to take every opportunity to roll back regulations that control corporate wrongdoing, and refuses to enforce existing regulations. At the same time, he encourages an already brutal, murderous system of police departments to treat suspects mercilessly.

Rule of law is dead in this country. I’m surprised we still even bother with a court system.

NeghVar (profile) says:

Prove competence

Before a case is assigned to a judge, the subject of the case must be compared to the knowledge of the field the judge has. Would you hire a top certified electrician to manage your Oracle database? Would you hire a defense attorney who specializes in family law to defend you in a copyright infringement case? The same should apply to judges. Judges are assigned cases which they have a proven competence of in the matter of the case. That way they cannot claim incompetence to defend a willful disregard of the laws.

Anonymous Coward says:

Judges wrong on this case yet Misnack STILL wrong on copyright.

Should have been finessed to dismissal at some point. But appears that the exact copying of label made just enough of a hook.

Of course, Masnick’s only use for the case is to attack all Copyright as evil. He’s always against clear and long-established law if prevents theft / grifting, and rarely has morality right as here.

Anonymous Coward says:

Re: Judges wrong on this case yet Misnack STILL wrong on copyright.

But was a benefit to my reading the prior story: I’d missed a DOUBLE GAP ZOMBIE! Two gaps totaling 100 months!

Sean T Henry or Sean (first only): 376 comments, a high-for-zombie 32 per year, and that despite 64-month gap to 2012! But there’s more! This “account” started 22 Jun 2006, then 3 year gap after first!

Hasn’t made another comment since the one in March. Now that’s ODD, huh?

takitus (profile) says:

Hurray for 'functional equivalence'

If these discs have been ruled to be equivalent in value and function to licensed copies of Microsoft software, does that mean unlicensed MS software is defective? If all of the value here is contained in the software (which is what this verdict seems to be claiming), how is it reasonable for Microsoft to sell “broken” copies which can be “fixed” for a license fee?

Value, according to this court, seems to be some immanent essence that exists not only in software, nor in licenses, but in all things—or, at least, in whatever thing is most convenient for maximizing Microsoft’s copyright claims.

That One Guy (profile) says:

Re: 'That would undermine their argument so it's not credible.'

That doesn’t smack of failure to understand. That smacks of refusal to understand.

Pretty much.

The government’s expert estimated that A(the licence, without which B is useless) plus B(the recovery software) was worth $25.

The defense pointed out that the defendant was selling something that only included B, such that for it to be anything more than a shiny new coaster/frisbee the buyer had to already own A, which was not included, and yet the court completely ignored that rather important fact as ‘not credible’, as though it was irrelevant rather than very relevant.

That was either willful ignorance or facepalm-hard-enough-to-knock-yourself-out levels of boneheadedness.

PS: attn Techdirt, I hate your new subject line limit. It needs to be longer.

You can likely thank TD’s biggest fan for that one, their habit of trying to cram a novel’s worth of text resulted in the new cap(not that they don’t have plenty of other tells), and while it can make things tricky at times I think I find ‘tricky’ better than ‘oh look, another novel in subject line form’ which not only cluttered their comment but any replies to them that didn’t specifically strip it out.

Uriel-238 (profile) says:


My take from all this is that we have a lot of IP-rights concepts e.g. copyright, counterfeiting, license whose definitions are ambiguous enough that no one can be sure that anyone else has in mind the same thing.

This is symptomatic of a broken system, and if it can put computer-recycling repair people in jail for merely doing their work, it could function as a device to incarcerate unpopular groups.

We in the US do love filling our prisons, and apparently we love filling our prisons when the crimes they commit are non-violent, non-harmful and well-meaning. We’re that desperate for more warm bodies.

We need to fix our IP law, and if we can’t fix it, we’d do better abolishing IP entirely than keeping what we got.

And we need to stop throwing people in jail for minor nonviolent offenses.

tp (profile) says:

Trivial to see

28,000 copies of recovery disks? That sounds like quite an operation. If they managed to find customers for 28,000 copies of microsoft’s recovery disks, and noone from that group ever suspected that these are pirated/counterfit goods, then our software vendors are blindfolded. This would be trivial for anyone who dealt with that guy to detect that he’s selling pirated stuff. It’s absolutely astounding that he wasn’t sued 3 years ago when the operation was slightly smaller.

Because noone from those 28,000 disk’s customers warned him about the pirated nature, he now faces pretty harsh jail time.

That One Guy (profile) says:

'The software sold, OUR software, is extremely dangerous.'

This counterfeit software exposes people who purchase recycled PCs to malware and other forms of cybercrime, which puts their security at risk and ultimately hurts the market for recycled products.

Given the software in question was, as far as I can tell straight from MS, being the same thing that someone would download from them, claiming that it opens you up to malware and ‘other forms of cybercrime’ is a rather damning admission there.

‘Official Windows Recovery Software: It leaves you vulnerable to malware and other cybercrime’ doesn’t really have a good PR ring to it, even if it is the argument they ended up making there.

That One Guy (profile) says:

Re: Balderdash

That might be true in more barbaric countries where the prison system’s focus is on vengeance or ‘make them pay‘, but here in the enlightened US the prison system’s primary, if not only focus is treating prisoners with dignity and with a focus on rehabilitation, with extensive funding ensuring that prisoners who have paid their dues are eased back into productive society with the absolute minimum hassle and stress for all involved.

Glenn says:

Fuck Microsoft indeed

I stopped using Windows some time ago, but that was mostly because Win10 sucks. I’ve never had much of a problem with Microsoft and the way they’ve run their software businesses (before Win10). (I started using personal computers back in the early ’80s, when Microsoft was a small company.) But this is different. From this point on I’ll go out of my way to get anyone and everyone I know off of Windows onto anything else and to do no business with Microsoft whatsoever. I urge everyone to do likewise. Microsoft doesn’t deserve your business, and there are much better options out there.

Cheezit says:


The Dell Reinstallation DVD contains the Windows operating system and will only work with Dell computers. When you buy a Dell computer it includes a license for the operating system. This license is assigned to the computer for the life of the computer and may not be used on another computer. You have the option to purchase the Reinstallation DVD when buying a Dell.

When reinstalling from the DVD it does not prompt for a license key since it recognizes the Dell computer it is being installed on. But you can usually find a Microsoft label on the computer that shows the key.

You can also download the Dell OS Recovery Image from the Dell support site using the service tag code found on any Dell computer.

These disks don’t allow anyone to pirate the Windows OS but rather to restore a Dell to its original condition.

This case is more about reproducing the labels to be exactly like a true original Dell Reinstallation DVD, i.e. counterfeit.

Anonymous Coward says:

Maybe Microsoft is trying to undermine itself and doesn’t WANT people using Windows 10.

They force them onto Linux etc by windows 10’s spying on you using your camera, microphone even when windows CLAIMS it’s turned off.

Copy documents straight to their servers etc etc.

and then FORCE businesses to have unwanted “updates” etc.

Anonymous Coward says:

If you wish to break this issue down to a copyright issue, at least do it right.

The hypothetical Del-Leno-Comp book company published a photography book that came or should have came with a CD of photos with it. For some reason, some of the copies did not contain the CD but each book has an unique serial number. You could download the photo CD from the publishers website, but you had to enter the serial number from the original book to unlock the CD.

Our defendant runs a used book store. Most of the used books either did not have or have lost the photo CD. No problem, he downloads the photo CD and includes one unaltered physical copy of the CD with each used copy of the book. Not wishing to make his customers upset, he looks at each copy of the book and makes sure that the page with the original serial number is there and undamaged. If a book is missing this page, the book is recycled as scrap paper.

Remember, the CD is locked and will not work without entering the serial number which is only provided physically printed and as part of the used book.

Next thing he knows, he is facing jail time for giving people free printed copies of the photos and cracked copies of the CD. Too bad he never did either of these two things, an example must be set.

TripMN (profile) says:

Re: Re:

This is possibly the best analogy I’ve seen in this discussion.

He’s supplementing something already paid for once and containing a legal license so it gets reused instead of recycled/trashed by providing the “supposedly free” reinstall CD portion of the equation that many non-technical people can’t or won’t do. The biggest thing he tried to do, having it made in China, was use mass generation techniques to reduce costs.

keithzg (profile) says:

A harsh lesson to stay away from proprietary software

The lesson is as clear as it is stark and unforgiving: never deal with proprietary software if you can possibly avoid it. Our lives are so filled with the products of corporations that we take this state as natural and safe; it is not natural, and we are not safe, they will crush us without hesitation if it serves their interests even in the most oblique or minimal ways.

And as long as they remain the only games in town that people think can be played, they’ll have nothing to fear in being so ruthless because they know their customers believe they have no choice. So don’t encourage their power, don’t support it, no matter how “convenient” it might seem at the time.

Name says:

From the Link You gave Mike

“Follow these steps to download Windows 7

This product requires a valid product activation key for download. Enter the 25 character product key that came with your product purchase in the field below. Your product key is located inside the box that the Windows DVD came in, on the DVD or in a confirmation e-mail that shows you purchased Windows.
After the product key is verified, select a product language from the menu.
Select either 32-bit or 64-bit version to download. If both are available, you will receive download links for both. Not sure which one? See the FAQ page for more information on how to determine the version(s) you need.”

If he had given out the link to go get the download instead, maybe he wouldn’t be in this mess.

It would appear he would have entered entered a serial number the very first time he downloaded the software. That apparently is the only way to get it. It is NOT a free download. I do not have a serial number for Windows 7 so I cannot download it for free.

The Wanderer (profile) says:

Re: Re: From the Link You gave Mike

Just to make sure we’re all on the same page, what link was that, and how did you find it / get there?

Because I reached a straightforward no-license-required download link for the Windows 10 ISO (see above), but couldn’t find one for a Windows 7 ISO without entering a license key.

If Lundgren’s discs were Windows 7 (as I seem to recall may have been the case?), and you can’t get a Windows 7 ISO without a valid license key, then there might be some basis for the objection after all.

Recycling Industry Veteran says:

Eric Lundgren is a joke. Ask anyone in the electronics recycling world and they will tell you the same thing. He’s not an innovator or a pioneer. This company that “he established” is actually owned by others. He was just the guy who could bullshit corporate accounts.

He is just a (bad) con man.

Uriel-238 (profile) says:

Re: "Ask anyone in the electronics recycling world..."

Wow, putting it that way drives me to distrust you can possibly be a Recycling Industry Veteran, let alone can be impartial regarding Lundgren, Microsoft or this incident. Feel free to cite sources to support their claims, but if they’re anything but well established, I’m already inclined to distrust them.

The next time you have cause to challenge someone’s character, try elaborating better than adolescent in intermediate school attempting to scandalize a peer.

Even if Lundgren was a confidence man, that does not determine his guilt in this case. And if the judge and jury were so abhorred by Lundgren’s character so as to ignore details of the court — which is what happened — It would serve as an indictment of the competency of the court.

marc says:

2 sides

Microsoft responds

They are addicted to the word counterfeit. Perhaps the discs were not correctly labelled? Perhaps they were pretending to be something they were not? If the defendant really sold 8,000 discs for $28,000 then he clearly was not dealing in free recovery discs. Or, was not telling people that they were free recovery discs.

I don’t know. I can’t know. But, it may not simply be a case of lawyers unfamiliar with the concept of recovery discs.

Anonymous Coward says:

Re: His reasoning

It might be helpful to manufacture a bunch of these recovery discs and offer them to repair shops to help people who were unable to download the recovery discs themselves.

Which given the state of broadband in the US, especially in areas where people will consider keeping an old machine running, or the purchase of a second hand machine, is a useful service.

Anonymous Coward says:

Re: 2 sides

Marc: You shoot Microsoft (yourself?) in the foot by directing us to their blog post on this. In Microsoft’s own words, from that page:

Out of one orifice, Microsoft says:
“Part of Mr. Lundgren’s defense also involved claims that he was trying to provide the community with something that was freely available anyway. This claim was rejected by the district court and the Court of Appeals. This is because Microsoft itself sells genuine versions of these CDs to refurbishers (hence the market for selling counterfeit copies).”

But out of another orifice, Microsoft says:
“When a refurbisher installs a fresh version of Windows on a refurbished PC, we charge a discounted rate of $25 for the software and a new license – it is not free. “

The first quote shows Microsoft LYING. This is a LIE: “Microsoft itself sells genuine versions of these CDs to refurbishers”. It does NOT do this. What is sells is stated truthfully in the second quote.

THANK YOU for confirming the key points in this case for me. Microsoft lied, and because of that, this guy is in jail. Having caught Microsoft lying in this case, about this case, I choose to give the rest of Microsoft’s claims the disrespect they have earned.

Sammie Bozic says:

I love me some free software and fair use, but after reading the appeals court ruling on it (which is mercifully short), I have to agree that Lundgren is in the wrong here.

The tech news coverage is focused on the issue of copying the 1s and 0s on those disks, but the reason customs went after him isn’t for that, it’s because he counterfeited the physical media. He went out of his way to print disks and packaging that looked identical to that produced by Microsoft, with the Microsoft logos and disclaimers and everything. And his emails show that his business plan was to sell them to people who would think it’s an actual Microsoft-manufactured disk.

If he had instead been selling plain disks that said something like "Installer downloaded from this Microsoft URL and burned to a disk for your convenience", then it’d be a more complicated fair use & copyright case.

The only thing at question here is whether the sentence is fair. And the judge did pretty much go by the standard sentencing guidelines. They say to use the "retail value" of the real product. In this case, the only way to purchase a genuine physical Microsoft-manufactured Windows restore disk is from Microsoft as part of a $25 set of a disk + license. So the judge used that, because there is no other "retail price" for the disk without the license, and the disk is not 100% worthless without the license.

Melinda Cheatham says:

Microsoft lost revenue

The real reason that Microsoft pushed so hard in my opinion (instead of doing the right thing) is that people who did not have the recovery disc could have potentially called in to Support and been charged for phone support. Microsoft is going to have to enable people to help them or help themselves and realize that they can’t make an example out of one helpful guy. if they didn’t want someone copying the information, they should have encrypted it so that only a purchased key would unlock the software. Geez!

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