Engadget reports that Eric Lundgren, who ordered unauthorized copies of Microsoft Windows, has lost in appeals court. He had received a 15-month prison sentence and $50,000 fine.
From Engadget:
Lundgren realized that people were simply discarding old computers and buying new ones, rather than trying to restore Windows. He decided to begin manufacturing restore CDs that could be sold to computer repair shops for a quarter each.
[...] However, things began to go downhill after US Customs got ahold of a shipment of these disks in 2012. They charged Lundgren with conspiracy to traffic in counterfeit goods, as well as criminal copyright infringement. The premise here was that Lundgren was providing users with a copy of the Windows operating system on these restore disks, but that was untrue. The users needed to have a previously purchased license, or the restore disks wouldn't work.
[...] While Lundgren argued that these disks had zero value, Microsoft claimed (through a letter and an expert witness) that these were "counterfeit operating systems" and that they had the potential to hurt Microsoft's sales. The pricing was set at $25 a piece, which was what Microsoft claimed it charged repair shops for these disks. The catch here is that this is the price for a fully licensed operating system, not Lundgren's version.
From The Verge:
Microsoft issued this statement to The Verge on the ruling:
"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."
The Right to Repair has been hotly debated in recent months, particularly because California proposed a law that would require electronics manufacturers to make repair information and parts available to product owners and to third-party repair shops and services. Seventeen other states have proposed similar legislation. Most major tech companies, including Apple and Microsoft, are opposed to the idea of letting users fix their own devices on the grounds that it poses a security risk to users, which we can see in Microsoft's above statement. Although as Lundgren's case demonstrates, the companies are likely more concerned over a loss in profit than anything else.
Related Stories
Electronics recycler Eric Lundgren was convicted of conspiracy and copyright infringement for his efforts regarding refurbishing old PCs. His sentence would have been 15 months in prison and a $50,000 fine except that he was granted an emergency stay of the sentence by a federal appeals court. Now his appeal is pending before the 11th Circuit though it has not yet been scheduled.
[...] McGloin also testified that Microsoft charges computer refurbishers about $25 for a new license and copy of the software but didn't differentiate that from what was done by Lundgren, who was not making a new copy of the software and intended his restore discs only for computers that were already licensed.
[...] Lundgren called his own expert witness, Glenn Weadock, an author of numerous software books who testified for the government in a major antitrust case against Microsoft that was resolved in 2001. Weadock was asked, "In your opinion, without a code, either product key or COA [Certificate of Authenticity], what is the value of these reinstallation discs?"
"Zero or near zero," Weadock said.
He should have listened to the experts like Ken Starks of Reglue. However, no mention was made by The Washington Post article about whether he or the court was aware that he could have improved the situation all the way around by simply upgrading the refurbished PCs to GNU/Linux instead of using a system that is always showing new ways to cause problems. The local LUG could well host an evening event with him as guest of honor to show how to improve the users' situation while staying out of jail.
Source : Eric Lundgren, 'e-waste' recycling innovator, faces prison for trying to extend life span of PCs
Microsoft's corporate vice president of communication Frank X. Shaw has given the company's take on the conviction of Eric Lundgren for allegedly ordering unauthorized copies of Windows:
In the last few days there have been several stories about the sentencing of Eric Lundgren in a case that began in 2012, and we have received a number of questions about this case and our role in it. Although the case was not one that we brought, the questions raised recently have caused us to carefully review the publicly available court documents. All of the information we are sharing in this blog is drawn from those documents. 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.
[Editor's note: We generally try to provide balanced coverage of a story. This interview is "straight from the horse's mouth" and is, therefore, going to contain the biases of the interviewee. Nonetheless, we thought the story interesting enough that we wanted to put it out to the community to discuss. --martyb]
Roy Schestowitz over at Techrights has an informal, follow-up interview with e-waste recycler Eric Lundgren about his ordeal with Microsoft. Lundgren spent time incarcerated as a result of his efforts to re-use old Wintel computers and keep them out of the landfill. He is now finally out of prison.
"The judge didn't understand the difference between a "Restore CD" and a "License"," he complained, "and Microsoft convinced the judge that the "Restore CD" was of equal value and functionality to a new MSFT OS w. new license! I was honestly dumbfounded.. I kept waiting for someone to get it in court .. Instead – The judge threw out all of my expert witness' testimony and only kept Microsoft's testimony.."
[...] Lundgren was sort of tricked if not blackmailed. It was the old trick of plea 'bargain' that was leveraged against him. "They threatened me with 47 Years in Prison," he told us. "So my only choice was to plea-bargain.. I told them I would ONLY plead guilty to "Restore CD Without License" but then Microsoft convinced the judge to value a Restore CD at the SAME VALUE as a Full Microsoft OS w. License!"
Earlier on SN:
Microsoft's Full Response to the Lundgren Counterfeiting Conviction (2018)
California Man Loses Appeal in Copyright Infringement Case (2018)
'E-Waste' Recycling Innovator Faces Prison for Trying to Extend Life Span of PCs (2018)
(Score: 5, Insightful) by Immerman on Thursday April 26 2018, @04:31AM (13 children)
Hell of a penalty for selling convenience discs that his customers could have downloaded and burnt themselves from Microsoft's own website. I've burnt a stack of them myself - I guess I'll have to remember never to leave them with my clients after I've reinstalled their legitimately licensed copy of Windows.
Yeah, it's still technically copyright infringement, but since the software is already being given away free, and is useless without a a license (which he didn't include), the punishment seems way out of proportion to the crime.
(Score: 2, Funny) by Anonymous Coward on Thursday April 26 2018, @05:12AM (1 child)
Now you don't promote usage of non-free software anymore, right?
(Score: 3, Interesting) by Immerman on Thursday April 26 2018, @01:47PM
Nope, do that all the time - copyright isn't an issue there.
Okay... maybe it is technically, since I do hand out convenience discs of Free software that doesn't include the source code as required by the GPL*, but I've not heard of anyone suing Free software advocates for not fulfilling the letter of the law in that regard. (Pretty sure I've heard that a link to the site you downloaded the program from doesn't actually cut it legally, if anyone chooses to make an issue of it.)
(Score: 5, Insightful) by Fluffeh on Thursday April 26 2018, @05:21AM (2 children)
The crime really here is infringing on a particular company's right to make money by selling operating systems. One with a lot of friends in high places. One that REALLY DOESN'T WANT people to know that they can upgrade their PC WITHOUT buying a new version of the operating system.
Given that, the punishment seems almost light. It's like they didn't have any other books to throw at the guy.
(Score: 0) by Anonymous Coward on Thursday April 26 2018, @06:45AM (1 child)
Maybe it needs to be treated the same by the citizenry.
(Score: 5, Insightful) by Anonymous Coward on Thursday April 26 2018, @01:29PM
Jury nullification is way too advanced a concept for the woefully uneducated masses. It's a way too powerful concept for the cows to countenance.
Every two years I bug everybody I know who doesn't vote. They're all convinced that there's some tally somewhere of abstaining votes and that if that tally gets big enough, something must be done! I tell them that if they want to protest, they have to vote for a Green, Libertarian, or Natural Law candidate. I get no takers.
We do not have democracy, because the cows cannot be arsed to even vote.
This year the excuses are starting to include "electoral college!" It's just... WTF. I am beginning to believe the original alt-right was on to something (Moldbug et al). Perhaps democracy is a pipe dream. I've seen how easily democracy is subverted into fascism though the apathy of the masses.
Jury nullification? That's a laugh. People with the right to exercise political authority with the ballot box would rather stay at home and complain about how things turned out, wallowing in the self-fulfilling prophecy about their own lack of efficacy. People actively avoid jury duty. People do not want democracy.
What else is there to do? Give up, and devote more time to meditation on impermanence and the temporary nature of all things good and bad.
It's at least more relaxing than
commanding the tideseducating the cows.(Score: 3, Insightful) by anubi on Thursday April 26 2018, @06:32AM (7 children)
Let me repost a snippet from above:
Looks to me like Lundgren was only providing a replacement disk for the standard restore-to-factory disk commonly shipped with machines. I fail to see anything wrong with what he is doing.
I feel his "sin" is about like selling a replacement wrench that fits a table saw.
While the manufacturer claims loss of the sale of another table saw because the customer might have been forced to buy another table saw just to get a copyrighted wrench.
Stuff like this just fuels my internal distrust of lawmakers by crafting this kind of law.
"Prove all things; hold fast that which is good." [KJV: I Thessalonians 5:21]
(Score: 3, Informative) by TheRaven on Thursday April 26 2018, @09:07AM (3 children)
The one wrongdoing that he has admitted is that he was printing disk labels that made these appear to be the vendor-provided disks that are usually bundled with the system. If there's a problem with the disks, this makes the customers believe that it's the original vendor's responsibility to fix it.
The copyright infringement claim is a bit harder to support. These days, OEM Windows installs typically come with a restore partition, but not a physical restore disk. If you buy such a disk, then it costs extra ($25 sounds about what I've seen). End users are able to download restore images from Microsoft if the disk with the restore partition fails (or if they replace the disk).
He'd have been fine if he'd downloaded the restore images and used them to reinstall when refurbishing a machine and left it with a restore partition.
He'd probably have been fine if he'd provided an unlabelled disk containing the restore image and sold it as a downloading service (i.e. he was downloading the image on behalf of the customer).
It sounds as if the thing that tripped him up was trying to sell the burned images as if they were official restore disks. The penalty seems excessive for this, but the US seems to have completely over-the-top penalties for copyright infringement in general.
sudo mod me up
(Score: 1, Insightful) by Anonymous Coward on Thursday April 26 2018, @09:43AM
I'll go as far as a much smaller penalty for attempted deception by mimicing original labeling to the extent of misleading a customer as to who made the thing - but withhold the heavy hammer until he dishonors a cease-and-desist from doing *that*. I know I certainly like to know who stands behind what I am buying... you know, sanctity of the brand name.
Personally, I would be lenient because I am not convinced anything nefarious was involved. Had this been a ruse to distribute malware, I would throw the book as hard as I could throw it.
IANAL, that's fer sure, but at the price he was asking, it sure looked to me like he was just providing a service to download the re-imaging software onto CDROM for the convenience of those who had misplaced their disk. Kinda like I was more than happy to purchase some LINUX CDROMS, when I know full good and well I could download it myself, but I was more than happy to have a magazine preselect some stuff they thought I would like, and include it as a purchase premium for their magazine.
I just think the penalty is in *far* excess to the "crime". All this copyright crap is getting so far out of hand over here I am getting embarrassed to admit I have to remit taxes to these guys.
Here's hoping the international community will get pissed off enough to rein us in. This witch hunt is getting way off of what I consider sane. They allow companies to harvest and share all sorts of stuff on we peasants, but have a peasant harvest and share *their* stuff and they suddenly think they have "rights" to it. They certainly won't honor my rights to data I make. If I try to look at this practically, trying to keep everything I do private, I may as well live out my life in a sealed cave... and if they didn't want their work copied, may as well never expose it to the public. This kinda stuff is about as unenforceable as trying to keep anyone from peeing in the pool or farting in the theater. It seems the powers that be try to find a few and publicly martyr them. What infuriates me is we public sit around like a bunch of sheep watching other sheep go to slaughter, when we should question if those lawmakers passing this law should be allowed to continue in office, or whether they - and the law they passed - tossed out on its ear.
(Score: 2) by All Your Lawn Are Belong To Us on Monday April 30 2018, @09:37PM (1 child)
The additional element is that the discs he was generating apparently were OEM issued images, complete to the special company folders. And then some of them were wrong - purported "Lenovo" disc carrying a "Dell" support folder, for example.
The supplemental emails make it very much seem like he wasn't restoring computers, he was only selling what absolutely appeared to be company-generated repair discs (down to criticizing the punctuation when it didn't match *perfectly*), maybe to other people who were doing the restorations. He was getting $4 per disc.
And if Microsoft charges $25 for the disc but offers the restore image for free, then a case can be made that the disc version has value - people are willing to pay the $25-$40 to get it on disk even if they could have gotten the download for free. If you can get a song perfectly legally in MP3 form but the LP is offered for sale at $100, does that make a replicated LP copy a) counterfeit contraband, b) copyright violation, c) no crime, or d) something else? I think that's a debatable question even though I have feelings about it (and suspect the law does not support the way I feel).
This sig for rent.
(Score: 3, Insightful) by TheRaven on Wednesday May 02 2018, @09:44AM
sudo mod me up
(Score: 3, Insightful) by loonycyborg on Thursday April 26 2018, @10:03AM
Only his wrongdoing they managed to prosecute is unauthorized copying of windows xp reinstall disks. Something that microsoft allegedly could sell for $25 each. The punishment is most definitely over the top though. Not only did he not sell any actual disks(because shipment got intercepted), but he wasn't even planning to sell them for $25. No real damage was done even if you think that those disks could have theoretically sold for $25 but for a lot less. Such blatantly extreme punishments are definitely incompatible with principles of free society. Government shouldn't have to waste time forcing people to shape their usage of information according to microsoft's whims through overblown punitive damages.
(Score: 3, Interesting) by Immerman on Thursday April 26 2018, @01:57PM (1 child)
I also fail to see anything wrong with what he was doing - but I do see something illegal. He was making and distributing copies of copyrighted software without a license. It doesn't matter that the software was useless without also having a usage license - copyright still applies.
Think of it this way - if the software *didn't* need a usage license he'd clearly be violating copyright, agreed? And the usage license has NOTHING to do with copyright, it's an independent requirement imposed by Microsoft. Why would you assume that imposing an additional requirement would remove existing limitations?
(Score: 3, Insightful) by requerdanos on Thursday April 26 2018, @05:37PM
Well, everything here looks nice except for him making counterfeit Windows discs. In my opinion, that's both illegal and wrong.
Making workbench copies labeled "California Man Presents: Windows Reload CD" doesn't meet that test--if illegal, that would still not be wrong.
Even the "Criminal copyright infringement" part of it is probably apt for someone making counterfeit software discs.
It is rather that the license or lack thereof is a pointless and irrelevant side issue, not a primary consideration. The guy was making counterfeit Dell-branded Windows CDs. He isn't Dell. He isn't Microsoft. That's a no-no. What kind of counterfeit Dell-branded Windows CDs, with or without license, is kind of beside the point.
Having geeks bicker about "Yeah, but [pointless nonsense about licenses]" just makes geeks look bad. Would everyone doing that, please stop. If he had provided counterfeit replacement license stickers, that would be illegal too. He didn't, and wasn't charged with that. All is right with the world in that respect.
Quoting an article in The Washington Post [washingtonpost.com] where he admits counterfeiting, and that it was stupid:
He is hailed as an "e-waste recycling genius." Okay, he is that, but that mostly isn't what he was prosecuted for.
He was prosecuted for manufacturing and importing counterfeit commercial software CDs from China. That's the way that works.
I have done plenty of stupid stuff too; I am not criticizing him. I am just pointing out that due to some regrettable decisions, what he did is both wrong and illegal, and he has only himself to thank.
(Score: 3, Informative) by bradley13 on Thursday April 26 2018, @07:24AM (4 children)
This is definitely the wrong decision. The disks did not contain licenses software - the license key was provided with the computers, on the usual sticker. The software is free for download.
He did infringe copyright by using companies' logos without their permission. He should have printed disks with a neutral label. Beyond that, however, he did nothing wrong.
Everyone is somebody else's weirdo.
(Score: 3, Informative) by Anonymous Coward on Thursday April 26 2018, @08:05AM (1 child)
"He did infringe copyright by using companies' logos without their permission"
No, he infringed TRADEMARK by using companies logos without their permission. Please keep the different types of IP laws straight, no matter how much companies love to make it look like they can mix and match what law they can use for the exact same issue to maximize punishments/fines/etc.
A patent is not a copyright is not a trademark.
(Score: 0, Informative) by Anonymous Coward on Thursday April 26 2018, @11:19AM
Logos can be copyrighted. Not all logos, some would be too simple, but some can be considered "a work" themselves.
The copyright owner doesn't even need to be the same as the trademark owner.
(Score: 2) by Immerman on Thursday April 26 2018, @02:04PM (1 child)
Legally it doesn't matter that the software is available free from the supplier - It's still copyrighted, the entire point of which is that nobody else can distribute copies without a distribution license.
(Score: 3, Interesting) by All Your Lawn Are Belong To Us on Thursday April 26 2018, @08:53PM
I agree with you that copyright still attaches to a work even if offered to a customer at no cost. However, I'm pretty sure that unless the work is registered with the copyright office that one has to prove actual damages or lost profits for the infringement to be actionable. Registration notwithstanding, someone who offers something at no cost will have a hard time proving he/she was actually damaged - that part of tort law is designed to make someone else's losses who and not punitive. If you offer it for free how are you losing?
If I understand this case, they may offer it free as a download but charge $25 if you wanted it in CD form. That's an actual charge with actual damage (even if it is free in another form or medium).
Also, if the infringed work is registered than there can be a statutory assessment without having to prove either the damage amount or the profit loss. The law presumes for a work registered with the Copyright Office that there is some degree of inherent worth to it even if it was offered for free.
Source: https://www.nolo.com/legal-encyclopedia/copyright-infringement-how-damages-determined.html [nolo.com]
That said, this whole thing is Microsoft eating their cake and having it too. Legally in the right but morally completely in the wrong IMVHO - they got paid for the copy of the OS and don't deserve additional funds to continue to make the license operational. This is a direct legal equivalent to rent-seeking. And nobody with the authority to do anything about it will care.
This sig for rent.
(Score: 4, Informative) by c0lo on Thursday April 26 2018, @07:30AM (4 children)
I got spoiled by good editors that would add a "Prev stories on Soylentnews" set of links and it seems I start to ask inconvenient questions when those are missing.
E.g.: ‘E-Waste’ Recycling Innovator Faces Prison for Trying to Extend Life Span of PCs (Feb 19 2018) [soylentnews.org]
A bit more detailed about the case, in which one of the reasons [soylentnews.org] for dropping the hammer on mr. Lundgren was related with
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 4, Informative) by realDonaldTrump on Thursday April 26 2018, @07:45AM (3 children)
You think it's missing, it looks like it's missing. Right? It's not missing. It's the second link. But, TERRIBLE submitter & editor didn't say Previous. Very confusing. Need better editors & submitters!
(Score: 0, Offtopic) by Anonymous Coward on Thursday April 26 2018, @01:08PM (2 children)
Mr. President, who do you recommend for the editor role to help lead the present and groom others for the future? Maybe the Soylent board of directors can use some professional outside assistance! You know how to run a business and a country, so I think your vote matters here!
(Score: 1, Offtopic) by realDonaldTrump on Thursday April 26 2018, @02:16PM (1 child)
I said it would be great if The Mighty Buzzard became Editor. Because he can tell when stories are Fake News. Like the story about coral "bleaching." Sounds like something a pornstar does, it's not.
(Score: -1, Offtopic) by Anonymous Coward on Thursday April 26 2018, @02:33PM
Well, we know that you know all about porn stars, right?
(Score: 1, Troll) by realDonaldTrump on Thursday April 26 2018, @07:41AM
People work very hard to make books, movies, music & software. Those folks, so many have a mortgage to pay. Or rent. So many have families to support. The money they spend is a big part of our economy. Especially in California. The folks at Microsoft work very hard. And this guy took their work, he sent it to China. And ordered THOUSANDS OF COPIES. Without paying Microsoft, without even asking. Maybe if he'd asked nicely, they would've told him "yes." Because he's getting their name out there. People who never heard of Microsoft, maybe they hear about it from Eric (beautiful name). And he brings in more business for them -- same reason I give away my tweets. I could sell them for a lot of money, but I make even more money by giving them away. Too bad he did something very foolish. NO PARDON!!
(Score: 3, Informative) by SomeGuy on Thursday April 26 2018, @03:36PM
What TFA does not mention (that other articles do) is that he was distributing copies of WINDOWS XP. This is important as you can not buy or download Windows XP from Microsoft. There seem to be mixed results determining if you can even activate it any more. Many otherwise perfectly usable PCs require Windows XP in order to operate properly. Microsoft has absolutely no interest in letting people re-using older machines, saving money, saving manufacturing effort and materials, or saving something from rotting in a landfill. They want you to buy Windows 10 and a new computer from their friend Michael Dell.
(Score: 2) by Freeman on Thursday April 26 2018, @03:42PM
The real reason he's going to jail. He was planning to sell them. The software wasn't freely distributable software.
Arstechnica:
"In 2011, the electronics recycling guru obtained a Dell-authorized Windows recovery disc from a business colleague, Robert Wolff, for $5. Lundgren thought that he could simply have these CDs re-printed in China en masse—to the tune of spending $80,000 on those discs. Back then, the idea was that he would resell these Chinese-made discs to Dell refurbishers for cheap—saving them the trouble of making their own for their own customers. (If, for some reason, a Windows user with a refurbished computer can’t locate a recovery disc or a license and product key, Microsoft will sell them a new one.)"
https://arstechnica.com/tech-policy/2018/04/why-the-man-who-tried-to-sell-windows-recovery-discs-will-go-to-prison [arstechnica.com]
Joshua 1:9 "Be strong and of a good courage; be not afraid, neither be thou dismayed: for the Lord thy God is with thee"
(Score: 2, Insightful) by Anonymous Coward on Thursday April 26 2018, @07:09PM
that isn't property of Microsoft...
It's absolutely crazy we're drowning in perfectly functioning computer hardware just because windoze decided to get gummed up or just stop working like it inevitably will. My computer is 10 years old and does absolutely everything I need it to do. And it's been in use all day every day. The hard disk did head crash a few years ago and was promptly replaced. Stop with the crazy consumption, please.
(Score: 2) by canopic jug on Saturday April 28 2018, @04:37AM
Over at The Verge there is a phone interview with Lundgren before he is shipped off to jail [theverge.com].
All the articles to-date have been weak and negligent about mentioning the role FOSS could have played in keeping the computers out of the landfill while keeping him out of jail. And to top it off all the distros have been weak about using exploiting the case as a marketing opportunity.
Money is not free speech. Elections should not be auctions.
(Score: 2) by All Your Lawn Are Belong To Us on Monday April 30 2018, @09:58PM
Regardless of what you feel about whether it was copyright infringement, or counterfeit goods (which nobody is really credibly disputing...), what is generally missing here is that Lundgren pled guilty. Yes, one can take a plea agreement because a defense is more costly / risks too much even if one may be innocent. However, Lundgren was saying by pleading guilty that he is willing to be guilty of both counterfeiting and criminal copyright infringement.
And the whole free vs. cost thing.... I have sympathy for that - if it is free somewhere then how can it be damaging? Both sides had expert witnesses that testified on the matter. The court chose to believe that Lundrgren would not have invested $80,000 in a clear attempt to make more (a $32,000 profit minimum if I get it) for something that has "no value." I think that's arguable.... But the core of the appeal he just lost was this very fact - the valuation provided by Microsoft ($25 per disc and discounted to 75% because of actual revenue of the disc unit for the period of the scheme - sounds like they took total income and divvied by number of units, I dunno...) was inflated is exactly what the court didn't but and the appeals court affirmed the trial court's judgment in.
At any rate, if you say you're guilty of the act, you're going to do the time.
This sig for rent.