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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.

12 of 170 comments (clear)

  1. Microsoft is slime... by Type44Q · · Score: 5, Insightful

    Microsoft is slime and no amount of PR spin is going to change that.

    1. Re:Microsoft is slime... by Gadget_Guy · · Score: 3, Insightful

      Of course Microsoft is slime, but that doesn't change the fact that they have the right to decide how they want their software to be distributed. In their Terms of service for downloading a Windows ISO it says:

      Unless otherwise specified, the Services are for your personal and non-commercial use. You may not modify, copy, distribute, transmit, display, perform, reproduce, publish, license, create derivative works from, transfer, or sell any information, software, products or services obtained from the Services.

      If we don't allow them to limit how their OS is distributed then surely we can't insist that the source code needs to be made available when distributing GPL software.

      And it seems dangerous to turn a blind eye to making indistinguishable knock-offs of operating system DVDs that could easily be modified to pre-install malware. Microsoft and Dell would not want their logos put on something that wasn't made by them.

  2. Abuse becomes their business. by Anonymous Coward · · Score: 5, Insightful

    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...

    1. Re:Abuse becomes their business. by LVSlushdat · · Score: 5, Insightful

      This little tidbit from their Windows 10 EULA *should* make ANY intelligent computer user run SCREAMING away from ANYTHING Microsoft..

      We will access, disclose and preserve personal data, including your content (such as the content of your emails, other private communications or files in private folders), when we have a good faith belief that doing so is necessary to.

      If you're recycling computers and putting an MS OS back on it, you're nuts and deserve this kind of abuse. Most of the computer recyclers I've run into put a lightweight Linux distro on their recycled machines..

      --
      THANK YOU, Edward Snowden!! Americans owe you a debt of gratitude (whether they know it or not..)
  3. Re:Are they? by phantomfive · · Score: 4, Insightful

    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."
  4. Re:Oh, no. Not this shit again by Junta · · Score: 3

    I think that's a misinterpretation as well.

    The software has copyright on it. Whether it is free or paid for, making a copy is a matter of law. Sure the law may be flawed and sure this may defy common sense, but no matter the label used, he made copies of MS software and distributed them to third parties without any agreement allowing him to do so. The trademark violation and efforts to deceive about country of origin and 'genuine' microsoft software are problems, but not required for him to be in trouble.

    Even if the software is no-cost, there are terms and conditions relevant to entitlement to copy (you can make copies for personal backup reasons because the law permits it, but not for redistribution). Otherwise, GPL and BSD licenses would not have any means to enforce it.

    For MS, this is going to be a tricky thing to spin in a good light. In their defense, if someone did this and they or the company that actually made the media put in a rootkit, not just a straight download of MS software, then MS could have a different PR problem, not doing enough to prevent malicious software and people assuming MS did it. Of course getting this story big and explaining this angle would work better than talking about "lost sales" (which clearly was not the case here) and perhaps asking for leniency for this case would have made for better PR moves.

    Of course he was *charging* for it to get profit, so sympathy for the person isn't *that* well placed, even if under the guise of recycling.

    --
    XML is like violence. If it doesn't solve the problem, use more.
  5. The real lesson by Anonymous Coward · · Score: 4, Insightful

    You use windows, go to jail. If he used linux he wouldn't be going to jail.

  6. Re:Couldn't this have been a revenue opportunity f by Darinbob · · Score: 5, Insightful

    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.

  7. Re:Oh, no. Not this shit again by Darinbob · · Score: 4, Insightful

    The trademarks however are not worth $25 per disk with the trademark. Also trademark violations are a civil offense, they don't result in criminal trial that can lead to jail time but instead are resolved through a normal lawsuit process.

  8. English, Jim - but not as we know it by Hognoxious · · Score: 3, Interesting

    Shortly after the Lundgren's was arrested

    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."
  9. Re:Are they? by AmiMoJo · · Score: 3, Interesting

    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
  10. Re: Are they? by ozzee · · Score: 3, Interesting

    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.