from the another-life-ruined dept.
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.
- 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.
- Lundgren established an elaborate counterfeit supply chain in China: Mr. Lundgren traveled extensively in China to set up a production line and designed counterfeit molds for Microsoft software in order to unlawfully manufacture counterfeit discs in significant volumes.
- Lundgren failed to stop after being warned: Mr. Lundgren was even warned by a customs seizure notice that his conduct was illegal and given the opportunity to stop before he was prosecuted.
- Lundgren pleaded guilty: The counterfeit discs obtained by Mr. Lundgren were sold to refurbishers in the United States for his personal profit and Mr. Lundgren and his codefendant both pleaded guilty to federal felony crimes.
- 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.
- Lundgren intended to profit from his actions: His own emails submitted as evidence before the court make clear that Mr. Lundgren's motivation was to sell counterfeit software to generate income for himself.
- Microsoft has a strong program to support legitimate refurbishers and recyclers: Our program supports hundreds of legitimate recyclers, while protecting customers.
TechCrunch calls Microsoft's blog post "spin" for misrepresenting recovery discs as equivalent to entire licensed operating systems, hyping the "elaborate counterfeit supply chain", etc. Frank Shaw also defends the company in the comments for that article.
Also at The Verge.
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.
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.
[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)