E-waste recycler loses appeal on computer restore disks, must serve prison term
washingtonpost.com
washingtonpost.com
"“These sales of counterfeit operating systems,” Microsoft lawyer Bonnie MacNaughton wrote to the judge, “displaced Microsoft’s potential sales of genuine operating systems.” But Lundgren’s disks had no licenses and were intended for computers that already had licenses."
and even worse,
"Hurley decided Lundgren’s 28,000 restore disks had a value of $700,000, and that dollar amount qualified Lundgren for a 15-month term and a $50,000 fine. The judge said he disregarded Weadock’s testimony."
Weadock was an expert witness (for the government no less) in a Microsoft antitrust case. When asked what the value of the restore disk was, he responded with zero, or near zero. The prosecutors were initially looking for $299 a disk -- the value of a full license.
This is the most egregious case of a judge ruling on something he or she does not understand I've seen in a while. This is an item Microsoft gives away for free to anyone with an internet connection, all this guy was trying to do was sell them for $0.25 to cover the cost of a disk and make it easier for people to fix their broken computers (allegedly).
Say I buy a computer with windows pre-installed that means the OS license cost is bundled in to the price of the machine.
Say I have a computer without windows, or maybe an older cheaper version of windows. Is it correct that these restore disks arent a utility to get a free new copy of windows?
Just trying to understand
The illegal act was a copyright violation: he made and distributed copies of copyrighted material without the consent of the copyright owner. I would be inclined to argue that his use was fair use, but based on what I know about copyright law, that argument is probably a stretch, and he didn't raise it in his defense. He plead guilty to the charges.
As to sentencing, the sentencing guidelines make the value of the illegally distributed goods the primary factor in determining the sentence. There is no objectively correct answer to this question, because no one sells license-less restore disks for any price. The three closest comparisons are
(1) The free restore disk image download offered by Microsoft. This is the same intellectual property, but doesn't come with a physical disk.
(2) OEM Windows disks that Microsoft sells for $25. These come with a license (unlike the defendant's disks) but do come with a physical disk.
(3) The original restore disks that come with a new computer. These match perfectly the intellectual property and the physical form, but they only come bundled as a small part of an expensive package, so it's hard to get a fair price from looking at this.
The defendant argued the free download was the better comparison, the prosecution argued the OEM disks were better. The judge sided with the prosecution, and assigned a value of $25/disk, which resulted in a stiff sentence.
I'm confused, what exactly are these, where can a private individual buy one? A Windows license key with (no media) is priced around $120, while an OEM license with no support is in the $50-$90 area, depending on the business relationship with Microsoft. If individuals were able to legally get a Windows license by "restoring" it for $25, it would be a riot, nobody would pay the retail price.
But if that $25 option is not available to consumers, then it makes the comparison to the free disks even more tenuous, and the fair use issue stronger, especially in light of the electronic waste issue. There is a fundamental social value that is being protected.
>The original Microsoft (COA) attached to the PC does not allow you to reload Microsoft Windows software when no original recovery media is present.
https://blogs.msdn.microsoft.com/mssmallbiz/2011/10/05/looki...
So the $25 doesn't come with a license. It gives you the physical media to comply with the license that came with the computer.
Dang. I should be treating those as more precious.
To be clear, I think the overall result here is an despicable perversion of justice, and I think US copyright law desperately needs to be reformed to include a more expansive version of fair use. I'm just explaining the way it works under current law.
That is correct. You still need a licence key to install Windows using those disks. Without the key the disk is worthless. They aren't and never were a way for people to get "free" copies of windows.
The value of Windows installation media is the cost of the disk it is burned to + the time it takes to burn unless there's an associated license (or a crack bundled that would let you bypass activation, which got laughably easy post-Windows 8 because of the new SLIC activation scheme).
Unfortunately, copyright law doesn't care - the copies were made, and the copies were distributed, unless the license explicitly allowed such copying Lundgren was in the wrong in the eyes of the law. Ironically, the same thing applies to the Windows 8/10 installation media you can download directly from the Microsoft website - though you can get it for absolutely free the license still prohibits distribution.
That's the cost, not the value. If value = cost, no one will ever make a profit.
Was this counterfeiting? Most certainly not in spirit, nobody was trying to say "here's a free/discounted copy of Windows" - there were no cracks on the media and you still needed a license to get Windows to activate, but the cold hard truth is the license agreement prohibits copying/redistribution of the installation media.
Lesson of the day: copyright law is stuck in the 1800's in many ways, so don't test your luck and ask Congress to fix it if you think it's broken.
If you had to restore a PC 10 years ago, your only options were to obtain a restore disk from the PC manufacturer, use a restore partition on the HDD (assuming it was intact) or buy Windows.
In the past, I had to get restore disk images on BitTorrent to fix friends computers.
It's just like you can offer some content on your website for free to anyone, but sue anyone who redistributes it for copyright infringement.
Presumably customers not receiving a restore image can now reclaim $299 from Microsoft as that is judged the value of the disc that was not included with their license purchase. Or indeed send back the install disc for at least a 50% refund.
Just think how much money MS would make buying back install discs for $150. /s (yes, that's right, at least -$150 per disc).
Crazy. That judge needs firing, or the person who put them in charge of this case does.
Windows is subject to copyright. There doesn’t need to be a license for you to agree to—that would be a contract.
Copyright gives the creator the final say on creating copies of their work. Just because someone gives it away for free-as-in-beer does not grant you a license to create and sell copies. Try recording and selling music from the radio if you dont believe me.
While there are exemptions to the rules like fair use, none of them applied here. If you’re unhappy with the judge, take it up with Congress. Because there is absolutely nothing wrong in the court’s application of current law.
They freely (libre and gratis) provide the files for download, the additional terms are laid out in contract. There's lots of precedent for assumed consent on web provided content.
They weren't selling the content they were selling facilitation of access to it. The discs provide a convenient means for people who are already licensed users of the content. Saying this is copyright infringement is like charging a router manufacturer or ISP with infringement.
In any case, this increases the value of MS Windows for those users, so actual damages are negative.
Given no end user ever acquired the media via this means the puniary damages are extraordinarily harsh. Add to that the rejection of expert witness, and the choice to assume provision of install media - that can't be used without a license - amounts to the full costs of a software product and I fail to understand how you can possibly consider this to be an even handed application of the USC.
They did not provide it “Libra”, and there is absolutely no precedent for assuming everything online is public domain. This is also a completely different argument than “fair use”.
> Saying this is copyright infringement is like charging a router manufacturer or ISP with infringement
That’s obviously different, or you would not make the analogy. ISPs transmit, they do not copy. There’s also an exemption in the DMCA for ISPs.
Why not actually look at the four factors of fair use:
The purpose and character of your use
the nature of the copyrighted work
the amount and substantiality of the portion taken
the effect of the use upon the potential market.
That’s three factors that couldn’t be more unfavorable to their actions. Since MS does offer replacement restore disks for 25$, there’s also clearly some impact on the market.
Stop arguing from the result you want backwards. Lobby for different copyright laws, but don’t go around insulting the last reputable institution in the country, i. e. the courts, with your willful and frankly far too obvious misinterpretations.
Right below "more download options" is this text: *Your use of the media creation tools on this site is governed by the Microsoft Terms of Use for this website.
In the linked Microsoft Terms of Use there's this: "Notice Specific to Software Available on this Website" [...] WITHOUT LIMITING THE FOREGOING, COPYING OR REPRODUCTION OF THE SOFTWARE TO ANY OTHER SERVER OR LOCATION FOR FURTHER REPRODUCTION OR REDISTRIBUTION IS EXPRESSLY PROHIBITED, UNLESS SUCH REPRODUCTION OR REDISTRIBUTION IS EXPRESSLY PERMITTED BY THE LICENSE AGREEMENT ACCOMPANYING SUCH SOFTWARE.
There's definitely a hole in that quote "to any other server or location" means you can duplicate from the initial download location, surely. It wouldn't pass an analysis based on intent, but I don't think contract law in USA cares about intent except in cases of obvious error.
Thanks for the note anyhow, never noticed the link there, pretty sure I picked up ISO links on a different page in the past, maybe on Technet.
I've given people access to a pre-written disc with such a download on, which they then enter their license details for. Presumably the judge would consider me guilty of copyright infringement if I were in USA.
Reusing licenses is a different problem, and one that also plagues full install disks.
The only way to turn that disk into an actual counterfeit OS would be to crack the activation or use a keygen.
Most restore disks I've used from OEMs have an OEM Key hardcoded on the disk so the user doesn't have to type in the license key on the side of their machine. These Restore Disks are permitted if the OEM is a Licensed Distributor, Lundgren was not a licensed distributor.
The ISO files that Microsoft distributes require the user to input a key.
His whole argument is questionable:
He is trying to reduce e-waste by manufacturing discs, which he says people lose or throw away, and then selling those disks to the very people who lost or threw away their disc originally?
He says the discs are used by people who feel comfortable restoring a restore crashed or wiped machines but who don't or can't create the restore media themselves. Microsoft's media creation tool is dead simple, you run it and tell it where to create the media.
As long as you have a computer. Best answer for this is households who only have 1 functioning computer. Usually low-income households.
One of my first jobs was working at a computer repair store. Customer would come in looking for a reformat and we'd give them a few options.
- We'll restore (pay an hour or so of our time).
- Buy a new licence (since we didn't stock restore disks and weren't going to spend time making them).
- Buy a new computer - with the advent of dirt cheap computers a lot of the time this was a viable solution.
These disks definitely fill a hole of having something you could give to clients and they could do the DIY route.
Because someone else lending them a ready-made windows USB key (from the free download ms offers) would be illegal distribution of copyrighted material.
So much for right to help with repair/fair use etc.
Don't ever look into precedent on cases involving firearms, marijuana, or encryption then :)
Microsoft's argument hinges on two damages: Either, they didn't get to charge a convenience fee to customers, or they were losing revenue by people unexpectedly extending the life of their computers.
Foolish judges and evil lawyers putting a decent person away for 13 months.
There's the problem.
“I got in the way of their agenda,” Lundgren said, “this profit model that’s way more profitable than I could ever be.”
On average judges defend the nation, money must flow up. The nation's tax income on Microsofts exploitation are bigger (or so thinks the judge) than the tax income on Lundger's (preventive) recycling business.
Your taxes represent your bullying/fleecing strength. When one tithe collector gets in an argument with another tithe collector, the goverment tends to agree with the tithe collector that brings the biggest tithes...
The population needs to be fleeced. The natural order of things and so on. So it is!
He wasn't distributing restore disks with refurbished PCs.
He manufactured 28000 Restore Disks containing Microsoft Windows and was selling them. He justified his actions by saying they were only to be used on licensed machines. That's like me selling a backup copy of your Book and "you're only allowed to read this if you bought the book legitimately."
To use your analogy, it would be like you redistributing an encrypted book file that the publisher had emailed me when I bought my hard copy, but I couldn't open it anyway unless I had the key from the back cover.
Windows 10 activation is done by device fingerprinting to match a license which is different from how windows was activated in the past. With previous versions of Windows you activated by providing a product key.
Restore and Recovery discs are different form standard installation media, the kind you can download for free from Microsoft.
R/R discs are custom builds from the OEM, who is required to have a software distribution license from Microsoft, and don't usually prompt for license activation. They circumvent the need for the user to input a key by either storing it on a recovery partition, in the BIOS, or hardcoding it on the media.
> To use your analogy, it would be like you redistributing an encrypted book file that the publisher had emailed me when I bought my hard copy, but I couldn't open it anyway unless I had the key from the back cover.
The point is, he doesn't have permission to distribute the software.
If I was selling "recovery" Kindle eBooks but only to people who pinkie swore they already purchased the book, do you think Amazon or the Publishers would mind? How is this different?
This is not the point of contention. He pled guilty to this.
The point of contention is the amount of damages Microsoft argued and the court agreed on. Microsoft argued these disks were worth the full-price of a Microsoft-sold disk+license, but these disks did not contain the license.
It's like being sued by Amazon for thousands of dollars (instead of a more reasonably number) because you resold physical copies of ebooks they already sold for free on their website.
https://www.washingtonpost.com/news/true-crime/wp/2018/04/24...
He wasn't actually convicted of distributing software illegally and the arguments for the cost of the licenses is moot. That being said, initially Federal Prosecutors tried to say the discs were valued at $299 a piece but Microsoft intervened and said that they sold refurbishers licenses for $25 and his were at most worth $20.
He was convicted of counterfeiting and copyright infringement for distributing media that had Dell and Microsoft logos and looked like legitimate media.
> The discs had labels nearly identical to the discs provided by Dell for its computers and had the Windows and Dell logos. “If I had just written ‘Eric’s Restore Disc’ on there, it would have been fine,” Lundgren said.
So why didn't he?
> He was convicted of counterfeiting and copyright infringement
"Copyright infringement" here implies "distributing software illegally". Licenses are not "works" and thus cannot be copyrighted. Trademarks cannot be copyrighted and trademark infringement is not copyright infringement.
> and the arguments for the cost of the licenses is moot
Copyright infringement by itself doesn't carry the sentence he was given. In copyright infringement cases, damages are calculated based on cost, loss-of-revenue etc. to the copyright holder.
From the very article you reference: "Hurley decided Lundgren’s 28,000 restore disks had a value of $700,000, and that dollar amount qualified Lundgren for a 15-month term and a $50,000 fine." (emphasis mine).
The entire point is that his disks had "zero or near zero" value to the copyright holder since they did not contain any licenses, and thus his sentence is unfair.
----
> So why didn't he?
Is that sufficient legal basis for the sentence?
As I said elsewhere, he should have been given the option to destroy the media and eat the cost.
What I object to is that the WP has framed Lundgren as having not done anything wrong and everyone is cursing Microsoft who is in the right.
> "Copyright infringement" here implies "distributing software illegally". Licenses are not "works" and thus cannot be copyrighted. Trademarks cannot be copyrighted and trademark infringement is not copyright infringement.
That's incorrect. A logo can be both Trademarked and Copyrighted.
> The entire point is that his disks had "zero or near zero" value to the copyright holder since they did not contain any licenses, and thus his sentence is unfair.
You're stating as fact the testimony of a witness, Glenn Weadock, and his entire testimony was ultimately dismissed.
> The judge said he disregarded Weadock’s testimony.
You're also not providing context around that quote to misrepresent it. Weadock was asked "In your opinion, without a code, either product key or COA [Certificate of Authenticity], what is the value of these reinstallation disks?"
That doesn't answer the question of if the disks have value with a code, or if the license is valid for the hardware which they're being used.
> Is that sufficient legal basis for the sentence?
Perhaps. I was asking why he went to the extra effort of making the disk look like an official restore disk from Dell instead of just scribbling "Eric's super wiz bang restore disc on it"?
The only thing this guy was doing was making it so customers don't have to download the iso on a USB or CD themselves, and recycling e-waste in the process.
The restore discs usually don't prompt for a key. It's either stored on a recovery partition on your disk, in the bios, or hardcoded in the disc media.
It doesn't say how his disc worked but at a minimum he was still acting as an unlicensed distributor. Microsoft grants end users the right to download and create media. It requires distributors to be licensed.
Federal prosecutors initially tried to nail him with $299 per disc but Microsoft intervened and said they sold refurbishers a $25 license and at most his disc should be valued at $20.
I think he should have been notified that his actions were potentially illegal and been given the option to just destroy the media.
So the fake logos increased the value of the discs from $0.25 to $20 or $25? If he had labeled them "Eric's Restore Discs" he'd have been totally in the clear?
It would be curious to find out. I've not read anything to indicate that Microsoft would have opposed that so an official statement from them would be nice.
The fact that Microsoft sells refurbishers licenses for $25 for "unlicensed hardware" seems to acknowledge that refurbished computers can retain their license.
That being said, I would be surprised if Microsoft allowed distribution of recovery media from an unlicensed sources regardless of the label.
"Unfortunately, in what seems to have been a huge mistake, the disks had “labels nearly identical to the discs provided by Dell for its computers and had the Windows and Dell logos,” the Times wrote. As a result, Lundgren pleaded guilty to two of 21 charges, conspiracy and copyright infringement. He told the paper, “If I had just written ‘Eric’s Restore Disc’ on there, it would have been fine.”
[1]https://gizmodo.com/e-waste-innovator-will-go-to-jail-for-se...
I've bought plenty of Microsoft media in my lifetime. They will tell you the only thing that matters is the COA. If the COA came with the computer the license is still valid. He wasn't selling discs with counterfit COAs on them he was selling recycled restore disks to go with computers that already had a valid COA.
So unless there is something else in the ruling, I don't know child porn on the restore discs, the author has this story exactly right.
License != Trademark
Further, the key point of this decision seems to be the value of each disk: Several hundreds of dollers, for a new retail licensed copy of Windows; $25, the price MS apparently charges for a restore disk and a OS license; or the price of a blank disk, plus the time it takes to download from MS and burn it.
Like he said in his defense, if he had labeled it "Eric's Restore Disc" instead of putting the Dell and Windows logo on it, he probably would have skirted any real repercussions.
How is that a defense?!? Yes, it's true that if you don't crime, you don't get punished for crime, but... he crimed. And, from the article:
> Lundgren had 28,000 of the disks made and shipped to a broker in Florida. Their plan was to sell the disks to computer refurbishing shops for about 25 cents apiece, so the refurbishers could provide the disks to used-computer buyers and wouldn’t have to take the time to create the disks themselves.
These discs were INTENDED to be provided to third parties who didn't know who actually made them. This goes beyond trademark infringement, I think.
If only...
I felt kind of bad about him going to prison until I read this, but that is some classic reasoning. When somebody is capable of justifying their criminality by just imagining away the main thing that makes it criminal, you need prison to tell them, yes, really, you can't do that.
"If it had just been a mule deer instead of an endangered species...."
"If I had just made the trades with my money instead of my clients' money...."
We use prison for a lot of purposes that it sucks at, but teaching people that they can't just yadda-yadda a crime away seems like a good use for it.
Violating a software license agreement should not result in jail time, ever.
the fact he sold to resellers make it even less shady. he sold a service to the resellers? or saved users time/bandwidth/trouble of burning image on botable cd?
any way you try to spin this will still go against comon sense the whatever spirit of the laws that are not "license to sue anything under the sun, because IP"
>Lundgren objected to the PSR infringement amount. He argued that the Sentencing Guidelines required the court to use an infringement amount of about $4 per disk, which was the price for which Lundgren and Wolff were selling their copies.
That's a different number than the article claims.
It's obvious that intellectual property is a social and legal construct, because the things considered property are intangible, but all other forms of property are also social and legal constructs.
Property is not merely possession -- it is the recognition by society and by the law that you have a right to possess things, and that those rights include preventing people from taking the things you possess.
If you look at the history of property rights in land, which are among the oldest and most fundamental property rights, you'll see how incredibly complicated they became, and how much they have changed over time, and how much of what we think is "just the way things are" is relatively new and does not exist for the reasons we think it does. The legacy of feudal land tenure in modern legal systems is a good example.
I'm an ancap, so I completely agree with you from a moral perspective... but c'mon. We all know that's not how the law works.
Really? Do you think that fraud is wrong?
Do you program in C++? This is like asking "How is this pointer to X not a pointer to Y? The bytes are the same!" They may be, but that's simply not how the rules work...
The correct headline is: "E-waste recycler loses appeal on 28,000 counterfeit windows installation disks, must serve prison term"
>The sentencing judge determined that the appropriate infringement value was the value of the infringed discs to small registered refurbishers: $25. The court found credible the government expert’s testimony that he was able to use the infringing discs to install functioning Microsoft software
So there were 28,000 discs with Microsoft and Dell logos which can be used to to install functioning Microsoft software
That's a different picture than the one painted by the article.
>In particular, the court noted that it did not find it reasonable to believe that Lundgren and his codefendant had spent at least around $80,000 to create discs that had no value. Using the $25 infringement amount, Lundgren’s guideline range was 37 to 46 months imprisonment. The court sentenced Lundgren to 15-months imprisonment
https://www.courtlistener.com/pdf/2018/04/11/united_states_v...
Did the journalist read the court papers?
I thought those discs could only “install functioning Microsoft software” if provided with a valid license key, a key Lundgren didn’t provide nor purport to provide. The “$25 infringement amount” seems like a bad comparison since those disks include a license key. Lundgren’s did not.
That said, I don't see what was the operation. How he created the disks, who are the customers, are there receipts, etc?
Lundgren should not have been sentenced to prison for this. At most he should have been punished for trademark infringement.
It’s a god damn travesty that we have judges who don’t seem to understand the very important technical details of the court cases they are judging in.
>The original Microsoft (COA) attached to the PC does not allow you to reload Microsoft Windows software when no original recovery media is present.
https://blogs.msdn.microsoft.com/mssmallbiz/2011/10/05/looki...
So that's the crucial point. Yes, the software was free to download, but you needed the original recovery disk to legitimately sell a refurbished computer. By creating counterfeit disks he would enable refurbishers to avoid the fee to Microsoft.
Thank you for digging this up. This is an important point, and I think a lot of us, including myself and the hapless recycler, have naively assumed that sticker plus iso equals a legit install in Microsoft's eyes. Nevertheless, it's still a travesty that he was convicted for this.
Conviction seems fine. The fine is debatable but roughly okay. It’s the jail time that makes no sense.
There's no other logical explanation. No one would go through the trouble of exactly replicating a physical CD with logos and all unless they had nefarious intentions.
In other words MS are trying very hard to make selling refurbished computers impractical, so please throw it away, and buy a new one with new Windows licence.
If the judge was on the ball the man should have been found guilty and fined 1c and attention drawn to ridiculous licencing in his summing up. Better for justice of course would be throwing out the terms of the licence and finding him not guilty.
So the $25 is the cost, to Dell etc, of volume purchase of Windows OEM along with the sticker with licence number.
Utterly unrelated to a restore disk for a machine that already has the sticker, and thus a valid licence.
That he is found guilty is a travesty.
Anyone with a license can download the ISO. Even then, you need the license to activate it once it's installed.
This guy was just providing the ISO burned onto a disk, with instruction for the user on how to activate it with their existing license.
Microsoft lost zero revenue - they just don't want people extending the life of their license, because they would rather people needlessly purchase additional licenses...
Just because it’s free doesn’t mean the owner doesn’t have rights. (This is also the basis of the GPL.)
In addition, if we are talking about general content of the Microsoft website, search engines routinely index store and cache the contents, and offer to serve it to third parties, without any intervention from Microsoft.
So no, if you post it on a website society recognizes that you are offering to allow a host of intermediaries copy and serve the content to intended end-users. Maybe this guy isn't all that sympathetic, maybe it's a little confusing because we are talking about CDs and binaries, but when you sit down and think about it this decision makes no sense.
What a colossal waste of resources.
It's about the damages.
I hope that aspect get appealed and a more reasonable punishment is found.
From my reading though, it didn’t seem like he did plead guilty to the copyright infringement of the data, only the logos. I don’t know what all of the counts were, but he only plead to a subset of them. And going in, his press interviews seemed to suggest that he didn’t quite get what the problem was.
But again, the punishment seems really harsh.
Lundgren had 28,000 of the disks made and shipped to a broker in Florida. Their plan was to sell the disks to computer refurbishing shops for about 25 cents apiece, so the refurbishers could provide the disks to used-computer buyers and wouldn’t have to take the time to create the disks themselves.
...
Eventually, the Florida broker, Robert Wolff, called Lundgren and offered to buy the disks himself as part of a government sting, Lundgren said. Wolff sent Lundgren $3,400, and the conspiracy was cemented. Both were indicted on a charge of conspiracy to traffic in counterfeit goods and criminal copyright infringement.”
This should not result in jail time. Is Florida really so free of violent crime and other more serious offenses that this case is a priority for federal prosecutors?
Why the hell didn't the prosecutors just ring up the guy and say, "Hey, Microsoft is pretty pissed about these disks. If you don't [destroy them / remove their logo] we'll have to prosecute you."
They have exactly that kind of discretion.
Lundgren wasn't setup, he wasn't coerced into doing something illegal. He was or was planning to do it and they just called him up and asked to be a customer.
This is similar to busting people for prostitution. You can either spend extraordinary time and effort in surveillance to catch them in the act. Or you can just dress in civilian clothing and approach them.
I'm also not convinced something like this didn't happened. All of his exposing about Microsoft double dipping and the whole system being designed to scam people out of money makes me suspicious of his true motivations.
Microsoft stepped forward and corrected Federal Prosecutors who initially sought $299 per violation. They stated that they sold refurbishers licenses for $25 and the discs had at most a $20 value.
Lundgren was convicted of counterfeiting and copyright violation, not piracy and is even quoted as saying if he'd labeled the discs differently this would have never happened. I'm curious if that statement was based on what he ultimately got convicted of or something else?
This strikes me as the far more reasonable outcome that didn't happen.
>I'm curious if that statement was based on what he ultimately got convicted of or something else?
Who knows. As a practical matter, I do see a chilling effect coming out of this judgement for those reselling Windows boxes - either don't do it or make damn sure you have your legal ducks in a row.
(edit:formatting)
Here's the original request for appeal: https://regmedia.co.uk/2018/02/20/lundgrenappeal.pdf
It seems to me like the key point is:
>In particular, the court noted that it did not find it reasonable to believe that Lundgren and his codefendant had spent at least around $80,000 to create discs that had no value.
Since the idea that they had "no value" was not accepted and since the CD's had actually the MS and Dell logo's the Law shifts the value (and thus the sentencing) from the value of the "infringing" good to the value of the "infringed" one.
All in all, it seems to me more like a case of "counterfeit Gucci bags" than a purely unauthorized software redistribution related one ...
EDIT: the last sentence above was meant as:
All in all, it seems to me that the Courts treated it more like a case of "counterfeit Gucci bags" than a purely unauthorized software redistribution related one ...
On the other hand that's the risk one takes when dabbling in the world of proprietary software. Where discouraging people from upgrading is seen as a threat to revenue and is attacked accordingly.
Had he printed 34,000 Linux disks we'd never have had this case and sentence, but then perhaps no one would have used those old PCs. It seems that someone has to lose.
E-waste is the result of computer transitioning from the role of "tool" to role of "disposable consumer good". The effort to provide people with the ability to easily repair their machines to a familiar state (being Windows), to me, seems the most effective way to combat e-waste.
EDIT: added 'being Windows' to second paragraph
People aren't any more scared of Linux than they are of Windows. Not to go on yet another rant about all the problems with Linux as a desktop, but refusing to acknowledge that they exist and instead blaming users is part of the reason people don't use Linux.
I'd be interested in your thoughts about Linux as a desktop; I just got done with a multi month battle to get my graphics card working (contradicting everything I say about Linux being easy), but I still love Kubuntu 18.
My thoughts on Linux litter my comment history. Some of it is inflammatory because it really bothers me that no one has built a half-decent alternative to Windows for my own needs, let alone those of all the various use cases out there, but people will insist that they have and then ignore the reasons you give them that they haven't.
I have two desktop computers, one is my primary machine and the other a home server that are 10+ years old and run Kubuntu and FreeBSD, respectively. Its easy to forget that some people don't want to swap out a CPU or add RAM over time, and that by using *nix there is a slower rate of resource bloat. Meeting people halfway by elongating Windows machine lifetimes is a great start.
I wonder if one could sell a USB configured to simply connect to the internet and download the software automatically.
I can download Ubuntu, burn it to CDs and sell or give them to others because GPL explicitly permits me to do this.
However, downloading the comment you just made, filling a CD with copies of it, and selling or giving it to others would violate your copyright to it.
I’ll release my previous comment to the public domain if you’d like to distribute it.
Additionally, this guy recycles 41 million pounds of e-waste a year. He should be celebrated. As a result of that, I can only imagine his larger clients may have to drop the use of the services of his company. Apparently, we don't care, and many comments online are philosophic in tone.
Even if the strategy were misguided, this outcome is absurd.
That Microsoft would so vigorously pursue this guy has rekindled my dislike for the company. They almost seemed to be on a turnaround path with developers with a cool editor and a new approach. This shows that they and their products are to be avoided at all cost as before.
All I can say is that, as developers, we need to work to not embrace Microsoft as they try to restore their relationship with us. And if you work there, well, what can I say... you should speak up about this or leave for more fair waters.
I remember listening to Steve Gibson (GRC), on SecurityNow podcast, saying that this is the exact reason why he is not willing to testify to a Court of Law any more. Having testified in court for some cases as "specialist" it is (almost always) needed to find metaphors and analogies on anything-technology. Some judges and lawyers are educated but twisting the meaning of something (misinterpreting the truth) is often the case.
From the original LaTimes article:
"In 2013, federal authorities intercepted shipments of 28,000 restore discs that Lundgren had manufactured in China and sent to his sales partner in Florida. The discs had labels nearly identical to the discs provided by Dell for its computers and had the Windows and Dell logos."
Oh. Well that changes things substantially - copyright infringement on discs created in China in bulk looks a bit fishy and more malicious than the wapo points out.
What if the discs were rooted?
What if their intent was to charge the other recyclers $10 a pop vs the $25 msft charged for the same thing?
I bet all those things were discussed in the courtroom and I'd love to see a really good source to understand this case vs watching the media try to wind up the pitchfork brigade as usual.
They weren't. What if he murdered someone? He didn't.
> What if their intent was to charge the other recyclers $10 a pop vs the $25 msft charged for the same thing?
So? It's not a crime for Amazon to charge lower shipping than Newegg.
Not what was happening at all.
MS charge Dell et al $25 for a copy of Windows Home OEM, complete with certificate of authenticity sticker and new licence number.
"a Microsoft letter to Hurley and a Microsoft expert witness had reduced the value of the disks to $25 apiece, stating that was what Microsoft charged refurbishers for such disks. But both the letter and the expert were pricing a disk that came with a Microsoft license"
He was re-creating a restore disk that only works when associated with the already existing, and still valid, licence.
I feel like this is what pardons are for.
We're seeing the reason for the U.S.'s >1% of adult population incarceration rate. The solution isn't occasional pardons but massive reform of the 51 criminal judicial systems in the U.S.
Psh! No US President cares for an e-recycler doing good for the world. They care for investment bankers who line their pockets (see: Marc Rich).
It boggles my mind that some DA put the effort in to this case.
As he said (naively) maybe he shouldn't have put somebody else's logo on the disk. Duh.
Aaron Swartz wilfully broke the law. This man didn’t. Not a good comparison.
I'm sorry, were you implying that I'm stupid? Not picking up on the implication.
"The judge said he disregarded Weadock’s testimony. 'I don’t think anybody in that courtroom understood what a restore disk was,' Lundgren said."
> In particular, the court noted that it did not find it reasonable to believe that Lundgren and his codefendant had spent at least around $80,000 to create discs that had no value.
They intended to get profit by creating counterfeit media. Trademarks are one of the most important intellectual property laws, without them you cannot rely on a company's reputation to inform you what to buy or even whether they followed safety regulations for more physical kinds of property. Since why would a counterfeiter waste money on safety: their reputation isn't getting damaged.
If you allow counterfeit media like this guy tried to do, you can't rely on the fact that the media doesn't have malware on it. Cause while I don't think Lundgren added malware, if you allow counterfeit discs, someone else eventually would.
[1] https://www.courtlistener.com/pdf/2018/04/11/united_states_v...
but then illegal for Lundgren (also on behalf of an end-user) to request a microsoft server for the recovery disc download and then send a disc of those bts to the end-user?
Is it because Lundgren is no ISP, or is it because the disc is considered a medium of exchange?
Most OEM Restore/Recovery media do not prompt the user for a product key. They either have key/license hidden on a recovery partition on the machine, stored in the firmware, or hardcoded on the disc.
It's unclear how his disc worked but what is clear is that he was not a licensed software distributor and did not have the rights to distribute Microsoft's media.
If someone gives away 100 free books, that doesn't give you permission to make copies of their book and sell them with the caveat that only people who received one of the free 100 books could buy them. How is this different?
Only recently did you need to enter your license key to download them. Regardless, you need the license key to activate the OS, so these disks did not enable anyone to use the OS who did not already own a legitimate license.
Microsoft's lost revenue came in the form of reduced sales of redundant licenses..
Recovery/Restore discs are custom made by OEMs under license from Microsoft.
> Microsoft's lost revenue came in the form of reduced sales of redundant licenses..
If this were true then Microsoft would not have persuaded Federal prosecutors to lower their estimates. Originally prosecutors claimed the discs were valued at $299 a pop but Microsoft informed them that they sold refurbishers a license for $25 and that the discs were worth $20 at most.
By making physical copies, Lundgren took Microsoft out of that equation. Now it was him and not Microsoft deciding who could get that data. So, unless Microsoft has granted you a license to distribute, then it doesn’t matter how much it costs... it isn’t legal. (Especially if you slap Microsoft and Dell logos on the disks.)
The copyright holder gets to determine how their data is distributed and what strings to put on that agreement. This is good. This is also what gives the GPL teeth...
Now if we all realize that ISP's are allowed to shamelessly distribute the recovery disk branded as authentic M$ warez, the judge might have been made to understand that it was not obvious for Lundgren that he would be forcefully fleeced.
Actually "void for vagueness" can be interpreted as a requirement for laws to be precisely defined, and this was not concocted by a clever cryptocurrency nerd.
The tech community should band together and fund Lundgren taking this to the Supreme Court. It's worth trying to stop this precedent.
I don't see why someone needs to go to jail for 15-months over this - especially given his reasonings.
If you thought microsoft had turned a new page - think again. Different tactics, same morals.
The continuing process by which otherwise functional hardware is made into trash simply because the market incentives don’t motivate the manufacturers to prioritize this is (borderline) tragic.
The way updates of operating systems require ever more powerful hardware drives me crazy. If prolonging the use of hardware was an explicit goal of the companies that make the operating systems, not only could a huge amount of waste be kept out of landfills, we could have devices whose performance increases over time.
1 YEAR and three months in federal prison? That's not a short amount of time for something that this guy had a reasonable expectation wasn't illegal.
You could go on a killing spree this afternoon - should we go ahead and lock you up now?
As a CEO, you can ignore obvious security flaws leading to 100 million social security numbers getting leaked without getting into jail.
As a CEO, you can sexually harass your employees without getting into jail.
Try and save the world by repurpose old computers, causing one of the biggest companies in the world to maybe lose 0.0000001% of their revenue and you're fucked.
Shame on you, Microsoft.
“These sales of counterfeit operating systems,” Microsoft lawyer Bonnie MacNaughton wrote to the judge, “displaced Microsoft’s potential sales of genuine operating systems.” But Lundgren’s disks had no licenses and were intended for computers that already had licenses."
But this isn't a ghost shift Louis Vuitton bag, it's literally exactly the same. Using Microsoft's trademark isn't misrepresenting the product.
But I cannot phantom how they cannot see how this will backfire quite badly, making them look both greedy and environmentally disconnected.
"Diet coach Daisy, sent to jail as McDonalds loses customers"
"CPU designer Claire, sent to jail as its optimized caching algorithm lowers demand for RAM sales"
"Louis Pasteur, unearthed from the grave, incarcerated as milk sales fall due to longer shelf-life"
But these examples are not good because the value for software is in the license really. Microsoft distributes the binaries of win10 for free, it is the license they make people buy. So it is rather a weak case for Microsoft.
It’s like selling your own burgers with less calories and calling them Big Macs and selling them next door from McDonald’s store. You can’t do that according to law
It's not like he was giving people keygens and cracks. He was just giving them the disc, burned from an ISO available for free on Microsoft's website, for the price of the blank medium used - and then giving people the information they needed to use their existing license rather than purchase a new one.
His crime appears to have been limiting Microsoft's ability to get people to pay for excessive licenses.
Also, a 15 month prison sentence for this fictitious price per CD? Really?
The end.
Rule of law. You go to jail for breaking the law, not for being unethical or immoral. Societies which forget this distinction fall fast. (Legislation, turning morals and ethics into laws, is the intermediating process your complaint more properly addresses.)
The problem is we criminally charge commercial infringement. The defendant put others' logos on disks he sold. This shouldn't result in jail time, but that's what the law says. The problem isn't the court, it's the law.
>The judge said he disregarded Weadock’s testimony. “I don’t think anybody in that courtroom understood what a restore disk was,” Lundgren said.
Oh, I think there was a problem with the court.
That testimony seems irrelevant to the charge which resulted in the jail time. Theoretically valueless or not, the discs were sold with an infringing logo. That combination--infringement and commercial intent--is a crime under our laws.
That's one of the sad truths about life. Those that break the law, or do things seen as unsavory, take pains to hide their actions, motivations, and responsibility. Those attempting to do good that inadvertently break the law don't take those steps because they didn't think they were doing anything wrong, or that if people thought they were they could of course explain away the misunderstanding.
What you're left with is this, where the majority of corporate malfeasance goes unpunished or severely under-punished, but the accidental minor criminal gets jail time. It's definitely a failure of the legal system, but how do you address the fact that those that worry about being caught up in the legal system will be more prepared for if they eventually are?
The court ignored expert witness testimony that the disks were useless without a valid license and came up with a ludicrous amount.
The defendants belief was that many customers weren't knowledgeable enough to download restore images from the internet. He was selling them to used computer shops so they could provide them to their customers as a courtesy.
He charged $0.25 per disc, and had 28,000. So his total would have been $7k? He eventually sold them for less than $5k. Not any kind of windfall profit.
Given you can download those restore images for free, what exactly was the copy right infringement?
I agree that the US system is fucked up when it imprisons people who haven't committed violent crime.
Do we know why? Courts don't throw out testimony for no reason.
In any case, from what I understand the calculation of value principally factors into the fine. The jail time results from the defendant selling disks with others' logos on them.
Another commentor dug up more detailed information, which intimated that the defendant wouldn't have made $80,000 worth of discs that had no value.
To be fair, arguing that someone you sold has no value is a bit hare-brained.
All that said, this is a side show. The criminal sentencing resulted, principally, from his using others' logos without permission on a product he sold. The combination of infringement and commerce is apparently something our laws are paranoid about.
It protects you from shoddy fakes that do stuff like install malware (which other counterfeiters might have tried if the law were more lax on counterfeits) or stuff not following safety guidelines (like fake chargers that burn your house down).
Well enforced trademark law means that you as a buyer can investigate a seller and know what you're getting based on their reputation. And well enforced trademark law means that you as a seller are incentivized to protect your brand by making good/safe products.
EDIT: you can argue copyright or patents are bad, but fundamentally I cannot see the world be a better place without trademark laws in some form.
Without a licence which he was not providing they are useless.
Oh, and the assholes that vote these idiots into office over and over again. I don't care if it's Pelosi/Boxer or Inhofe/Cruz, they all are pieces of shit.
Because people are people, and many of them view the position of AUSA as a stepping stone to $800/hr jobs at white collar criminal defense firms or prestigious political appointments, they tend to file cases with which they can make a name for themselves. One way for them to do that is “creative prosecution” - charging people for conduct that isn’t clearly in violation of a given statute, and then trying to shoehorn the case into a conviction or guilty plea. There is no moral hazard for them in doing this - if they lose, nobody cares, and if they win, they get credit for their genius - so they will do it again and again until it works.
That’s what happened here - they managed to shoehorn a conviction in a highly questionable case, and the AUSAs behind it will ultimately leverage this into a better job and a better life. I’m not sure that voting for individual AUSAs is the answer, but something needs to be done to reign these people in. They currently have free reign to burn lives to the ground for their own gain.
The CEO's job is to create value for shareholders. The government's job is to create laws that benefit society and enforce them.
Fine, a lot of CEOs suck but it's basically their job to suck to the degree allowed by the law. Why don't we work on changing the laws instead of endless complaining about the CEOs.
It’s unfortunate when people get punished because other people don’t understand how technology works.
“Senator, we don’t sell data!” - Plato
He still owes me $100 from 2004, can I get that back in 2004 FB Stock $100 equivlant?
I guess pressuring MS to drop the charges is too late. We can't have good man in jail over this.