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Microsoft Attempts To Spin Its Role in Counterfeiting Case (techcrunch.com)
Eric Lundgren, who has spent his life working on e-waste recycling programs, was arrested and charged with "counterfeiting" Microsoft restore discs earlier this week, part of a controversial, years-long legal fight that ended when an appeals court declined to overturn a lower court's decision. Lundgren argued that what he was offering is only recovery CDs loaded with data anyone can download for free. In an interview with The Verge, he said, "Look, these are restore CDs, there's no licenses, you can download them for free online, they're given to you for free with your computer. The only way that you can use them is [if] you have a license, and Microsoft has to validate it.?" Lundgren was going to sell them to repair shops for a quarter each so they could hand them out to people who needed them. Shortly after the Lundgren's was arrested, Microsoft published a blog post which stridently disagrees with Lundgren's characterization of the case. From a report: "We are sharing this information now and responding publicly because we believe both Microsoft's role in the case and the facts themselves are being misrepresented," the company wrote. But it carefully avoids the deliberate misconception about software that it promulgated in court. That misconception, which vastly overstated Lundgren's crime and led to the sentence he received, is simply to conflate software with a license to operate that software. [...] Hardly anyone even makes these discs any more, certainly not Microsoft, and they're pretty much worthless without a licensed copy of the OS in the first place. But Microsoft convinced the judges that a piece of software with no license or product key -- meaning it won't work properly, if at all -- is worth the same as one with a license.
[...] Anyway, the company isn't happy with the look it has of sending a guy to prison for stealing something with no value to anyone but someone with a bum computer and no backup. It summarizes what it thinks are the most important points as follows, with my commentary following the bullets. Microsoft did not bring this case: U.S. Customs referred the case to federal prosecutors after intercepting shipments of counterfeit software imported from China by Mr. Lundgren. This is perfectly true, however Microsoft has continually misrepresented the nature and value of the discs, falsely claiming that they led to lost sales. That's not possible, of course, since Microsoft gives the contents of these discs away for free. It sells licenses to operate Windows, something you'd have to have already if you wanted to use the discs in the first place.
Lundgren went to great lengths to mislead people: His own emails submitted as evidence in the case show the lengths to which Mr. Lundgren went in an attempt to make his counterfeit software look like genuine software. They also show him directing his co-defendant to find less discerning customers who would be more easily deceived if people objected to the counterfeits. Printing an accurate copy of a label for a disc isn't exactly "great lengths." Early on the company in China printed "Made in USA" on the disc and "Made in Canada" on the sleeve, and had a yellow background when it should have been green -- that's the kind of thing he was fixing.
[...] Anyway, the company isn't happy with the look it has of sending a guy to prison for stealing something with no value to anyone but someone with a bum computer and no backup. It summarizes what it thinks are the most important points as follows, with my commentary following the bullets. Microsoft did not bring this case: U.S. Customs referred the case to federal prosecutors after intercepting shipments of counterfeit software imported from China by Mr. Lundgren. This is perfectly true, however Microsoft has continually misrepresented the nature and value of the discs, falsely claiming that they led to lost sales. That's not possible, of course, since Microsoft gives the contents of these discs away for free. It sells licenses to operate Windows, something you'd have to have already if you wanted to use the discs in the first place.
Lundgren went to great lengths to mislead people: His own emails submitted as evidence in the case show the lengths to which Mr. Lundgren went in an attempt to make his counterfeit software look like genuine software. They also show him directing his co-defendant to find less discerning customers who would be more easily deceived if people objected to the counterfeits. Printing an accurate copy of a label for a disc isn't exactly "great lengths." Early on the company in China printed "Made in USA" on the disc and "Made in Canada" on the sleeve, and had a yellow background when it should have been green -- that's the kind of thing he was fixing.
Microsoft is slime and no amount of PR spin is going to change that.
Sometimes it seems that companies are more involved with abuse than doing healthy business.
Windows 10 is possibly the worst spyware ever made.
7 ways Windows 10 pushes ads at you...
... always.
AC comments get piped to
Just remember your opinion is also based upon spin.
Microsoft?
If it's their disks and they're used for recovery, couldn't they ask the user to upgrade (for a fee, of course) to:
- Windows 10
- Office 360 (or other flavours)
- Visual Studio
- Online support
Thereby locking in the Microsoft experience and making it easier for customers to use the computers rather than considering putting Mint on them because Microsoft products are too much hassle.
At worst, this would be Microsoft being seeing as exploiting a market rather than beating up somebody who is trying to make their OS available to everyone.
Mimetics Inc. Twitter
He didn't go to jail for burning the OS onto discs and distributing them.
He went to jail because he was committing trademark infringement by printing Microsoft and Dell logos on the discs and using trademarked names on his pirated discs.
If the discs would have been a plain label with only the logo of his company and something like "Operating System Restore Disk version 7" or "Operating System restore disk version XP" printed on them, he'd still be a free man.
Or if he wouldn't have been charging for the discs, he would still be a free man. But we are a nation of laws, and the law says that if you're making money off of someone else's trademark you're guilty of a crime. I think this case is bullshit, and you should think it's bullshit too. But if a company doesn't defend their trademark they lose the protection under the law, so they had no choice but to let this case proceed whether they liked it or not.
Not saying MS or Dell are "good guys" or anything, but this is not a case of "going to jail for giving away Windows discs without a license", and anyone who frames it that way is intentionally being obtuse.
Wow. That Slashdot summary was almost English. But it least it showed a fundamental lack of understanding of how the legal system works. /s /.'s offshored "editors" strike again.
-- I'm old enough to have lived through six different meanings of the word "hacker."
instead of a copyright case, so point to Microsoft.
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If he were handing out a few CD-Rs of freely downloadable software to people that need them, I'd say that's fair use.
Having them made in bulk in China with intent to pass them off as genuine and Made in USA is something else entirely.
They want to be thought of as so ruthless that if one even commits the thoughtcrime of copying software, they will be prosecuted by the full power of Microsoft. This guy is a feather away from that ($0.25 cents a disc for free software? Is he even covering his DVD cost?) and is serving jail time. But they also want to be thought of as good guys making the world a better place. Kind of like the Goldman Sachs CEO saying he was doing "God's work" prior to the malfeasance uncovered when the 2008 Financial Crisis hit.
They are very happy to send this unmistakable message, despite feeble public protestations.
Scenario 1) : There is more to this than appears. This could be corroborated by the harsh sentence he received as well as not a single disagreement by any court. Two courts upholding a verdict that making a copy of a free disk which can't be used without a license doesn't sound like we know everything about this case.
Scenario 2) : The legal system of the courts is fundamentally broken for letting it get this far. If it is as first appeared then this case should have been kicked to the kerb without ever having gone to trial. Corporations do incredibly stupid shit constantly and usually the only people it affects are the lawyers who get paid by the hour.
In either case I find it hard to get really angry at Microsoft. As slimy as it would be that they go after this guy (if it is as first appeared), the justice system .... errr ... legal system should have sorted it out very early on.
He could have put his own label on them and then sold them as recovery disks. Given he was running a business already he could have asked his attorney how to label them to avoid any problems. A disclaimer they were recovery disks and not provided by MS or Dell? OTOH, 15 months is an over reactions well. He admitted to copyright violation by copying Dell's trademarks, a fine would be more appropriate for importing fake goods than jail. It sounds like there is more to this story than the blog post presents. I wonder how his customers represented the disks to their customers? A repair shop could just a easily download and burn the programs to a DVD and not worry about a label beyond a Sharpie saying what version of the OS it recovers.
I'm a consultant - I convert gibberish into cash-flow.
This is a text book case of copyright infringement. He wasn't downloading movies and watching them, he was making copies of operating system discs for financial gain. This is the exact reason the laws were written.
Only the State obtains its revenue by coercion. - Murray Rothbard
You use windows, go to jail. If he used linux he wouldn't be going to jail.
Yea, because Microsoft NEVER tried to dilute (read:steal) trademarks:
MacOS X -> Windows XP
WordPerfect-> MS Word
iMovie->Moviemaker
MacOS X (10)->Windows 10 (why else skip 9?)
iTunes-> Zune
How can we name a product that gets close to stealing a trademark, but doesn't, and will confuse people who might not know exactly what product to buy?
I'm sure others can list more examples...
Do you know how many copies of Red Hat Discs I've made over the years! And I've SOLD THEM!
There is a snag if you've got an old computer with a broken OS and no way to connect to the internet. The recovery disk helps with that. Upgrading to Windows 10 is impossible on most of the computers, and even if it weren't you have no OS to download the files to attempt to upgrade. So a recovery disk is the logical and seemingly legal way to do so.
However, Microsoft says these are "lost sales". The only logic where this makes sense is if they consider a user staying with an older product instead of throwing away the computer and getting a new one with a new OS pre-installed. Ie, being able to repair the computer.
Microsoft wants people to upgrade and is desperate enough for this that they're willing to let someone go to jail rather than allow broken computers to be fixed.
That's what the smartphone companies do as well. I was in Silicon Valley where the CEO's complained about the "mend and make do" World War II mentality of their customers IT departments. To them, having to support old hardware was holding back software and hardware development as well as sales of new hardware.
Vintage computer adverts: http://www.vintageadbrowser.com/computers-and-software-ads
Those who defend the GPL against copyright violations are likewise SLIME.
You appear to have left out the thing, owned by one Lundgren, that was arrested.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
When the title of a submission includes the word, "spin", can we really trust that it is unbiased?
Otherwise, it's just an opinion piece masquerading as fact.
Have you ever tried getting your hands on a legitimate recovery disc? You can't get them from Microsoft. If you try, if you're lucky enough to get a response, you'll be told to go to your computer's OEM.
Have you tried you get a recovery disc from an OEM? Good luck finding information on their website on how to do it. If you do manage to find instructions, odds are you will not be able to use the obvious, simplest option: download and burn a disc. No, you'll have to jump through hoops proving that you qualify to receive a recovery disc, then you'll have to pay a stupid amount of money for something that cost them a few cents to make plus a stupidly expensive shipping charge. At best it should cost maybe $5 total, but I've run into demands for $30-$60. For one stupid disc containing software I've already paid for.
Nobody wants to actually sell you a recovery disc. They want you to buy new, either a new license & disc or a new computer. If you insist on acquiring a recovery disc, you are heavily punished for it.
What Lundgren did might have been technically wrong -- reproducing recovery discs without authorization -- but from a practical perspective it made perfect sense. Properly-acquired recover discs are a PITA to obtain and are stupidly overpriced when you can actually source them. Had he managed to acquire the recovery disc image as a burnable download, he would have been even more in the right were it not for the labels.
He wasn't trying to make gobs of cash off his discs, he was trying to keep perfectly functional computers out of landfills. The software for the machines was already paid for and licensed. Adding several tens of dollars to a computer for a 50-cent disc can make a difference to the people who would buy an otherwise-landfill-bound computer.
Lundgren's likely right: he was nailed because he tried to make the labels look like the discs were the $60 ones that the OEM sells. Had he just labelled them "Eric's Recovery Disc" or "this disc was burned from a recovery image downloaded from $OEM" he would have gotten away with a slap on the wrist at most.
Microsoft screwed the pooch, as usual. They could have acknowledged what Lundgren was trying to do, chastised his methods and then provided him with legitimately-sourced discs that he would be required to give -- not sell -- to the people who needed them (never mind the landfill-bound waste of material because the contents of the discs would be identical to Lundgren's copies). They could have magnanimously blessed his actions and his discs. They could have done a variety of things to come out of this looking like good guys. But no, this is Microsoft. The haven't "won" unless they come out smelling like shit.
Microsoft isn't necessarily in it to win. Microsoft's primary goal is to make sure everyone else loses. If they happen to be the last one standing, that's just a happy bonus.
Right of first sale / forced to rebuy keys is also part of this.
At first they where saying each disk costed about $299 the full retail price of windows and then later MS said we just make refurbishers pay $25 an system for a new key.
But lost in all of that is the MS clams that the paid for key is voided at or before it get's the to refurbishers. But in some cases systems going there may have an OEM key + an CORP site key on them.
Say you were to sell a product, X. It's your product. It's good*, and you have an established client base. You distribute that product with a label, X. You have to control the distribution channels, so other actors do not take your product and modify it, potentially instaling backdoors. You do provide an image to download off your servers, complete with signatures, for free, to improve support for your customers. Someone takes your image, burns it to a disk, labels it as coming from you, and distributes it *to your customers!*. What's stopping that someone to modify the image, thus causing damage to the customers, which will identify it as coming from you. You will have to handle the fallout, spend time investigating the issue via your ticketing system, maybe send it to your forensics team to see if how if it was modified. You stand to lose customers and brand reputation by allowing unofficial distribution channels. What if that product was Kali, and someone would distribute it with the official logo to you, as coming from the team?
Any computer that's old enough to have shipped with Windows 7 or older is likely using a processor older than Sandy Bridge (released 2011, vs Windows 8's 2012 release date). Sandy Bridge was the first time Intel took reducing power consumption seriously - a typical Sandy Bridge processor idles at around 35 Watts, with a peak power draw of around 90 Watts. Previous processors like Core 2 Duo would idle around 70 Watts, peaking at 100 Watts.
By a remarkable coincidence, if you pay the U.S. average electricity price of 11.5 cents/kWh, if a device is left on 24/7 for a year, each Watt it consumes translates almost exactly into $1 for the year. So if you own a Core 2 Duo computer and leave it on 24/7 drawing 90 Watts for the system at idle, it will cost you an extra $65 of electricity than if you replaced it with a modern system which draws 25 Watts while idling. It doesn't take many years for that extra electricity cost to exceed the cost of a new computer.
So as much as I love to berate Microsoft and Windows 10, the financial argument against them here is rather weak. Upgrading to a newer computer doesn't just make Microsoft and Intel more money. It also saves the buyer more money over the long term (via lower electricity bills).
If merely copying the restore disks is copyright infringement, then there's no need for serial keys and the DMCA provision criminalizing bypassing encryption meant to protect copyright.
If copyright is being protected by serial keys or DMCA-protected encryption, then copying the media without bypassing those copyright protection mechanisms isn't copyright infringement. All the person has done by redistributing such unaltered software is reduce the copyright holder's costs by doing the work of duplication and distribution for them.
From what I've read, his "financial gain" was 25 cents per disk, designed to recoup his cost of optical media and burning the software to the disks. By comparison, most movie studios charge $7-$9 for replacement blu-ray disks, meaning the amount he was charging was completely in line with recouping his material costs.
The only mistake he made based on my reading of the case was stamping the DVDs to make them look like authentic Microsoft disks.
The correct thing to do was put Linux on the computers and provide them as is. If people want Windows they can pay for it. It's people hiding the true cost of Microsoft's products that are helping keep their monopoly in place. Maybe instead of trying to cover up Microsoft's crappy business model they should have exposed it for the fraud it is. Want to run that 3 year old PC? That'll be $150 for a boxed copy of Windows. Want XP/7 on it? Sorry, Microsoft has decided you can't get it anymore. Guess you should have chosen a PC platform that supports your old applications.
Well, sure, if you leave it on all day. I think people on a budget who just don't run out and buy a new replacement aren't leaving the computers on all day. I think my mom has her laptop on maybe 1 hour a day or so.
The cheapest computer I can find right now is $250. At $65/year, it would take 3.8 years to justify a new computer based on electricity cost - if it were left on 24/7 when not in use. We all have to make our own judgement calls, but that's a pretty long time for return.
Guy is trying to give old laptops a new life
Legally downloads recovery disks from the laptop manufacturer's website
The activation codes are still on the old laptops
Sells the recovery disks for 25 cents (cost of the cd) with the old laptops
Microsoft says he's counterfeiting the OS
They just don't want him to legally cut into their planned obsolescence business model with their old products.
Sometimes cutting into a business' profits means you are competing with them. Sometimes it means you are stealing from them.
Brick, really? You're fucking dumb as well. The computer functions regardless if its running an operating system or not. Bricked means the hardware itself is no long responding to user input. Not booting windows is about as far from bricked as you can get.
Only the State obtains its revenue by coercion. - Murray Rothbard
YOU have won ONE BILLION dollars! - payable at the rate of US$0.01 per decade. Enjoy!
$65/year is about $5.50 per month, a relatively small sum even for someone in pretty bad financial shape. OTOH even a cheap computer will cost a couple of hundred... in one lump. in many cases that ain't happening https://www.npr.org/2016/04/24/475432149/could-you-come-up-with-400-if-disaster-struck
You can argue that no one should allow themselves to get into such a state, ( i might tend to agree...) but that is irrelevant. A significnt number of people are not in a position to junk old hardware even if they would prefer to do so.
Sorry Boss, I can't complete my assignment; the boot drive got corrupted during a power failure, and I have no restore disks... Oh... ... pick my personal effects up at the security station .... yeah, I understand ...
According to legend, when Bill Gates when told China always pirates software, he said "How do we make sure they are pirating Windows [over some other OS]"
Your ad here. Ask me how!
I've absolutely had enough of their monopoly and abuse of power. They no longer deserve any respect in the deverloper community and we need a revolution in the computer Operating system and productivity market to sort this out. It's time developers started to back their products with ethical standards in the same way other corporations must made advancement in ecological standards. Microsoft must not be allowed to survive.
The keys to destroying Microsoft :
* Functional, secure and fair use OS. (Linux based, Desktop easy to use, and install new apps)
* Office style product (OpenOffice) with Exchange equivalent. (not IMAP and not POP - a new mail standard for sync.
* Netflix/Streaming and H264/Divx playback as standard. VLC might come to table on this.
The deserve to die, and never come back. They must be destroyed. Just like Carthage lets sow salt into their earth.
How nice of you to come out and state these things are pretty much worthless AFTER he got sentenced. How very bloody convenient for you and your fucking profit margin you lying stinking sacks of SHIT.
For my legal protection I will no longer reinstall your software and will only provide Linux to friends and family.
At a savings of 65 dollars a year, I could run that Core Duo for 15 years before it would cover the cost of a new 1000$ business machine.
Let's say i've got an 9 years old Acer laptop which still functions absolutely fine, except the Windows OS which apparently needs a complete overhaul. Let's say i didn't receive a system recovery disk when purchased the laptop or lost it during the years, irrelevant.
Dear Microsoft, please be so kind to point me in the right direction, where can i find a FREE recovery disk / system image for my computer? A download link will do it. Thanks
So as much as I love to berate Microsoft and Windows 10, the financial argument against them here is rather weak.
How about the angry outbursts over the horrible Windows 10 user interface that keep three people from doing their work for each user forced onto Windows 10?
(I'm one of the Windows 7 users unfortunate enough to share an office with a Windows 10 user and I don't get much work done when he's at work).
That only works if you are rich enough to buy a new computer from the start. Otherwise, they'd need to save up for a new computer *on top of* their electricity bill, which happens to be even more expensive than saving up before buying, which they don't have enough money to do.
Feudalism has returned. Only instead of nobility that controlled the land needed to make a living, our overlords are now billionaires who control all the tech crap we have allowed ourselves to become dependent on.
The future is looking an awful lot like a dystopian sci-fi story.
Don't want to get sued?
Don't use Microsoft's products.
Simple.
Did anyone bother looking at some of the evidence from the case?
https://blogs.microsoft.com/on-the-issues/2018/04/27/the-facts-about-a-recent-counterfeiting-case-brought-by-the-u-s-government/
The guy is a slimeball, intending to profit from doing this, and trying to set it up on a very large scale (also with other software). Pretty eye-opening stuff if you bother to read before forming an opinion.
Almost enough to make you feel sorry for microsoft.
$65?
Yes it does?
One could argue it wouldn't even pay for itself in the time it took to become obsolete...
The one problem I always had with that legend was... what other OS would they be pirating?
First sale doctrine only comes into play if the 80,000 disks he sold were purchased by him with a legitimate license to have that copyrighted material.
The right of first sale does not give you the right to make 80,000 copies of something you had a license to use.
Lock is pirating ass up forever. Itâ(TM)s what he deserves.