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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
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.
Maybe his opinion is based on facts. Have you thought about that? Some people go into effort to read and understand a situation. You don't have to choose a favorite spin doctor, you can dig deep and seek understanding.
"First they came for the slanderers and i said nothing."
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.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
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.
You use windows, go to jail. If he used linux he wouldn't be going to jail.
He sold them at near cost, 25 per disc, for a software that is entirely useless without a valid license already, for people who don't have a recovery disc (though they could've just gotten it themselves online for free, but hey, not everyone is tech savvy, hence the need for people like him to provide said discs)
If microsoft cared about customers, they would keep offering downloadable ISOs of their discs on their site, long after the support for it is over.
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.
These discs did not have an operating system on them. They were copies of a restore disc which is freely available online from Microsoft and most major computer vendors. You can get them trivially over the internet, unless of course you have a broken computer. The discs he was selling was for $0.25, which is essentially the cost of the disk itself with no profit.
This is not at all the reason that copyright laws were written. And besides the case was mostly about trademark and not copyright. Yes, he made a mistake, it's worthy of a lawsuit but not jail time.
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
> for financial gain.
You keep using those words -- it doesn't mean what you think it means.
By selling the CDs EACH for $0.25 ???
$0.25 was basically to cover the cost of operations.
Did he break:
* The letter of the Law? Yes
* The spirit of the Law? No.
But let's keep being focused on the tree and missing the complete fucking FOREST -- all those computers that could be SALVAGED.
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."
For the average person with only one computer it becomes REALLY HARD to get the CD image and burn it when your computer is already a brick.
-=This sig has nothing to do with my comment. Move along now=-
He wasn't selling licenses. He was selling CDs with data on them.
-=This sig has nothing to do with my comment. Move along now=-
He did not license it. The code did not actually work without a valid license from MS.
Most ACs are not even worth the keystrokes to insult them. Be generically insulted by this and ignored otherwise.
Copyright is a legal right created by the law of a country that grants the creator of an original work exclusive rights for its use and distribution.
So, let me get this straight. He was selling (violation) copy-written works he'd copied (violation) to disks and distributed (violation) for a use not approved by the author of the work.
He's not allowed to copy anything without written permission, not allowed to sell a copyrighted work without written permission, and also not allowed to distribute a copyrighted work without permission.
No one disputes he was violating copyright law. The judge was sympathetic to what he was trying to do. The only thing people argued about was the value of the disks themselves in how they relate to damages to the copyright author. Microsoft wanted each disk to represent a potential lost license sale (as only they should be distributing restore disks and if people can't burn their own, they will have to buy a new license to have a functioning PC... or buy a new PC with a license), the defense wanted the disks to be worth zero or near zero. They ultimately were decided to be worth something in-between
There's nothing holy or sacred about the law in itself unless it prevents people from being harmed.
Remember, the law used to support slavery, prohibit inter-racial marriage, and a whole host of other things we find abhorrent today.
It's mostly a code designed to control people, written by a bunch of impotent old people for sale to the highest bidder ... I mean lobbyist. Don't mistake legality for morality.
You say that MS sells those recovery disks for $25. I can't find any evidence for this assertion from searching online. Can you please provide a link?
The
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.
You are doing pretty much what the article accuses Microsoft of doing. That is, confusing a recovery disk that contains no license with a copy of the software. From the article -
These discs are for repairing or re-installing a copy of the OS. They did not come with licenses and Lundgren was not selling or providing licenses.
If you think the article is wrong, then explain how and why that is.
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?
It's got nothing to do with licences. The discs were pretending to be something they were not (genuine Dell products), which is fraud.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
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).
Trying actually reading what ArchieBunker said
Eric was NOT doing it for financial gain. The proof was that he was only charging $0.25.
It doesn't matter what Microsoft says they are worth. The price that Microsoft charges is completely irrelevant. HINT: It was a FREE download.
> MS sells the discs for the same price.
[[Citation]]
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.
RE comment "....... He expected a tidy profit from this investment. ......."
From the article
Lundgren was going to sell them to repair shops for a quarter each so they could hand them out to people who needed them.
Hardly a profit ... more likely ... just cover costs ....
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 evidence presented in court suggests that claim was a lie. Microsoft's blog post has PDF versions of the emails submitted as evidence here: https://blogs.microsoft.com/on...
Note how we talks about it providing a steady source of income, and how the sale of 8,000 discs netted him $28,000. That suggests he was wholesaling them for $3.50 to his friend.
The most damning email is the one where he tells his friend about how hard it is to spot that his discs are fake, so good is the forgery.
He clearly was not doing the community a favour here, he was profiting off discs he passed off as genuine.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
Sure, he pleaded guilty to that. That's not the point. The point was that the severity of the sentence was because of Microsoft testimony saying these disks were worth $28 each. That's ehat gave the prosecutor leverage when in fact they are free.
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.
The copyright on a book is still valid if you can't read it. It's still a copyright violation if the copy won't play.
You're an idiot. The contents of the disc are copyrighted by Microsoft. Only they are allowed to distribute the contents. It doesn't matter if he charged a penny, financial gain means money was charged regardless of his costs.
Only the State obtains its revenue by coercion. - Murray Rothbard
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
The laws you speak of work to keep the GPL enforced as well.
Only the State obtains its revenue by coercion. - Murray Rothbard
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!
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.
An irrelevant example, as that is a completely different situation. Software is incomplete without the license. The book is complete.
Most ACs are not even worth the keystrokes to insult them. Be generically insulted by this and ignored otherwise.
$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?
That's hardly relevant... The software is provided for free by the copyright holder under the condition that they not distribute it (particularly using disks fraudulently depicted as theirs)
Your snark only veils ignorance in this instance.
Dislike it all you want, but MS was the copyright holder, and they have the right to determine how *every* *copy* of their software is made and distributed, fair nose notwithstanding, and this quite clearly wasn't that.
*fair use
CDs with licensed data on them. He was not authorized to re-license the copies of that copyright dated to other recipients. He did so regardless. He then also violated trademark law, and committed fraud. He was fucked 5 ways from sunday. I don't get why people are trying to defend him.
Perfect example, actually.
The software is entirely complete without the license, you simply can't use it.
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.
So for your "perfect" example the customer can get access bu changes on his side, while in the real case only the manufacturer can make access possible.
Are you mentally challenged?
Most ACs are not even worth the keystrokes to insult them. Be generically insulted by this and ignored otherwise.
Why can't it be both?
Any sufficiently unpopular but cohesive argument is indistinguishable from trolling.
So why was he selling them for a profit in the first place then if people could just download them for free? And more to the point why was he going to so much effort to try to make them look like genuine products produced by Microsoft/Dell if it was just a physical copy of something downloadable free on the internet? The fraud charge was because of the fraudulent behaviour in trying to make the product he was selling look like a genuine product from somebody else.
I am not. But I suspect I understand copyright, and you don't. Also, English.
You're arguing that since the code did not have a key, it was not covered under copyright.
Person who replied to you is arguing that copyright exists, whether or not you can use the copy.
He's right, you're wrong. It's pretty simple really. Your reaction is making it clear who has the mental deficit here.