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posted by chromas on Thursday April 26 2018, @04:20AM   Printer-friendly
from the don't-copy-that-floppy dept.

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.


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  • (Score: 3, Interesting) by All Your Lawn Are Belong To Us on Thursday April 26 2018, @08:53PM

    by All Your Lawn Are Belong To Us (6553) on Thursday April 26 2018, @08:53PM (#672314) Journal

    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.

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