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Microsoft attempts to spin its role in counterfeiting case (techcrunch.com)
199 points by sizzle 6 months ago | hide | past | web | favorite | 147 comments



I hate to take Microsoft's side on this but reading the emails from court documents seems to show that this guy clearly knew he was counterfeiting and profiting from it. See Microsoft's post here https://blogs.microsoft.com/on-the-issues/2018/04/27/the-fac...

If anything I would say that the techcrunch post is overly misleading. Although they may be right that Microsoft overstated the value of the discs in court which lead to a harsher sentence.


Hey, I'm the author. Yeah he's 100% guilty of counterfeiting, pleaded guilty and acknowledged everything up front, faking the discs and everything.

The issue I and others have been trying to highlight is that as you say that Microsoft overstated the value, not a little, but a lot, and also contrary to the basic facts of the matter. Essentially he committed one crime and was sentenced for another.

He was selling recovery discs with no licenses, which are free for anyone to create on their own or for refurbishers to burn as many as they'd like of. They pay Microsoft for bulk licenses then print as many discs as they need.

Lundgren never sold or attempted to sell licenses, which of course create the value of the product. The discs were worth the convenience cost of however much a shop would pay to not have to print them themselves. No Microsoft sales were harmed, if a license was needed Microsoft is the only place to get it, these discs are for re-installation purposes.

Microsoft in this case convinced a judge that a "copy" of Windows is worth the same whether it is licensed or not. That's not true, and as if it weren't enough that this misrepresentation of the facts took the day in court, a guy is going to prison for 15 months because of it — the sentence was directly affected by the value determined by Microsoft's $25-per-disc assertion. If the discs were valued accurately he might have had a fine and probation, or a month in jail.

I wrote another post talking about this earlier:

https://techcrunch.com/2018/04/25/how-microsoft-helped-impri...

and for what it's worth regarding the $80K and $28K payments, Lundgren's account of it is the first was for all kinds of stuff his Source Captain company manufactured over there for refurbishing purposes (old hard drive cases, CD caddies, weird screws) and the second never took place because the goods were never sent — all confiscated in the raid on Wolff's place.


> Microsoft in this case convinced a judge that a "copy" of Windows is worth the same whether it is licensed or not. That's not true, and as if it weren't enough that this misrepresentation of the facts took the day in court, a guy is going to prison for 15 months because of it — the sentence was directly affected by the value determined by Microsoft's $25-per-disc assertion. If the discs were valued accurately he might have had a fine and probation, or a month in jail.

And how exactly did you arrive at this judgement? Restitution is solely to make whole on the financial damage.

His jail term is completely appropriate for counterfeiting and piracy with intent to distribute and profit under federal jurisdiction.


>>His jail term is completely appropriate for counterfeiting and piracy with intent to distribute and profit under federal jurisdiction.

WOW you have a completely screwed set of ethics and morality if you believe putting a person in a cage for 15 mos for duplicating restore disc is "completely appropriate"


I'm interpreting law as I was taught. And if you're going to question my ethics and morality over my interpretation of the law and sentence, I don't take the work of others and distribute copies of it while claiming them to be genuinely produced and spend great effort to hide that fact to defraud the buyers while also trying to downplay law enforcement and coach people on withholding information from federal agents to enrich myself.

Would his sentence have been more lenient had the value of discs estimated to be $100,000 instead of $700,000? Nope.

Would his sentence have been more lenient had he not spent effort to infringe on copyright and attempt to make fakes that are harder to discern? Maybe.

Would his sentence have been more lenient had he not actively tried to deceive and defraud those buying the discs from him believing them to be genuinely produced by Microsoft/Dell? Surely.

Would he be scot free in this situation had he just shipped a free OS? Definitely, but recycling or reducing waste wasn't his intent as you can see for yourself from his email and bank records.

He didn't even spend the minimal effort to inquire with Microsoft if they would help him in pushing more recycled computers with Windows but instead decided all by himself to fly to china to create 20,000+ copies of genuinely sold recovery disks and to sell them as genuine when he clearly knew they weren't while coaching his codefendants to play dumb, suggesting them on evading scrutiny from customs and pressing them to sell more product so he can realize returns on his investment. If that doesn't show criminal intent, I don't know what does.


>>I'm interpreting law as I was taught. And if you're going to question my ethics and morality over my interpretation of the law and sentence

The fact that you seem to get your ethics and morality from the law says a lot. I don't, I personally find large segments of the law to be highly immoral and unethical.

>Would his sentence have been more lenient had the value of discs estimated to be $100,000 instead of $700,000? Nope. Would his sentence have been more lenient had he not spent effort to infringe on copyright and attempt to make fakes that are harder to discern? Maybe.

Ok that may be a factual statement, that has nothing to do with the fact it should not have been a criminal matter in the first place, but a civil matter where only monetary damages would be punishment

I believe prison should be reserved for people that are a physical danger to other, not as punishment for harming a corporations profits

>He didn't even spend the minimal effort to inquire with Microsoft if they would help him in pushing more recycled computers with Windows

They would for $25 per computer, That is MS double dipping method for recyclers to force them to purchase a new license for a computer that was already licensed by the OEM at the time of manufacturer

>If that doesn't show criminal intent, I don't know what does.

Again you are talking about the law, I am talking about ethics, surely you to not believe all thing that are illegal are unethical and that all thing that are legal are ethical? If you do believe that I return to my original statement in that you have a completely screwed set of ethics and morality


> Again you are talking about the law, I am talking about ethics, surely you to not believe all thing that are illegal are unethical and that all thing that are legal are ethical? If you do believe that I return to my original statement in that you have a completely screwed set of ethics and morality

> The fact that you seem to get your ethics and morality from the law says a lot. I don't, I personally find large segments of the law to be highly immoral and unethical.

As much as you'd like, the judicial system doesn't work on ethics as judged by you. I hope you understand the functionality of the judicial system before making such broad statements about it.

> The fact that you seem to get your ethics and morality from the law says a lot.

I don't, but I also don't let my own feelings affect my interpretation of law.

> Ok that may be a factual statement, that has nothing to do with the fact it should not have been a criminal matter in the first place, but a civil matter where only monetary damages would be punishment

Do you know what the difference is between civil and criminal law? It doesn't appear so.

> I believe prison should be reserved for people that are a physical danger to other, not as punishment for harming a corporations profits

So do I to a certain degree, but you must first understand that the corporations comprise of people like you and me and not some evil mind CEO who eats all the profits.

> They would for $25 per computer, That is MS double dipping method for recyclers to force them to purchase a new license for a computer that was already licensed by the OEM at the time of manufacturer

You're making presumptuous statements here (and I know because A - your statement is false, $25 is only necessary if the device does not have a recovery disk already; B - your statement is in no way related to my quoted response of approaching Microsoft if they'd be interested in partnering in a recycling program). I'm not going to engage with your prejudice against a corporation of your dislike.

> Again you are talking about the law, I am talking about ethics, surely you to not believe all thing that are illegal are unethical and that all thing that are legal are ethical? If you do believe that I return to my original statement in that you have a completely screwed set of ethics and morality

When all else fails, paint the other person in black?

You believe software should be free to distribute and copy because it is a never ending source and can be created out of thin air once someone has developed it?

How about you try counterfeiting US Dollars which are also created out of thin air?

Software is the currency of the tech companies that develop it and they like to protect is just like our Govt. likes to protect their own economic interest. If you don't like a company you have the choice of not using their products but don't go around saying they're a bunch of evil morons for protecting their interest.


>>So do I to a certain degree, but you must first understand that the corporations comprise of people like you and me and not some evil mind CEO who eats all the profits.

While it is true the corporations are "made up of people" the very nature of a corporation separates liability from those people, thus when you remove said liability people generally tend to behave worse than they would when they are personally liable.

Then there are the group dynamics where many many people working together can justify, rationalize, and excuse all manner of actions that when done as a individual, they would individually find abhorrent but when done as a group they do not.

This is why at best a corporation can only be described as amoral (at best)

The fact that corporations are "made of people" has no relevance to my comments

>As much as you'd like, the judicial system doesn't work on ethics as judged by you. I hope you understand the functionality of the judicial system before making such broad statements about it.

The legal system of a society should be judged by the ethics of the members making up that society, people like you that believe the law is the law and we just have to accept that are part of the problem in society today

I see this law as being unethical as such I am advocating against this law.

You believe the law is the law and should remain unchanged as if it was the word of a god.

>You're making presumptuous statements here (and I know because A - your statement is false, $25 is only necessary if the device does not have a recovery disk already; B - your statement is in no way related to my quoted response of approaching Microsoft if they'd be interested in partnering in a recycling program).

Yes it is as that is their "partnership program" for Recyclers,

I do not believe MS should be allowed to charge $25 simply because the owner of the device did not keep or make a recovery disc upon purchase. I believe (and the law supports) that the physical disk is irreverent, it is the LICENSE that they sell not the Physical media.

Of course MS, and most other tech companies, want to have it both ways, picking a choosing which sections of law they want to apply based on the circumstances. Sometimes treating it has a Sold Good where the physical product matters, but then other times saying it is a licensed product and the physical media has no value

>How about you try counterfeiting US Dollars which are also created out of thin air?

I dont think you want to know my thoughts on Fiat Currency. (hint I am not a fan)

>Software is the currency of the tech companies that develop it and they like to protect is just like our Govt

I have already stated I find our government (aka the law) to be largely unethical and immoral. So you defense is to point out how the Tech Companies are acting like our government... i.e Unethically and Immorally

>If you don't like a company you have the choice of not using their products but don't go around saying they're a bunch of evil morons for protecting their interest.

I do not define virtue as " protecting their interest." it is possible to be a Evil Moron and be " protecting their interest." at the same time.


The sentence is based on the value of the infringed goods, right? A recovery disc doesn't have the same value as a Windows license - Microsoft gives one away and charges for the other. The discs only have value to someone who already has a product key or buys one alongside it. As far as I can tell no damage was demonstrated at all. Microsoft doesn't sell or make these discs, and Dell (once) provided them for free alongside existing licensed installs.

I'm not sure what the appropriate sentence should have been, but I strongly disagree that it's this. Those discs were not worth $700,000. Were they worth $200,000? 6 month term. $20,000? Fine and probation. They were worth something, all right, but not $700,000. That's just not accurate.


> I strongly disagree that it's this. Those discs were not worth $700,000. Were they worth $200,000? 6 month term. $20,000? Fine and probation.

Is your sentence estimation accurate?

> The sentence is based on the value of the infringed goods, right?

For financial restitution part of the judgement, yes. But for any deterrence in terms of jail time or restrictions on further operations it isn't as nuanced as you put it out to be, it does not matter whether you intended to counterfeit and distribute $100,000 worth of goods or $1,000,000 worth of goods.

> Were they worth ... $20,000?

His own bank/paypal transaction records and emails show they were worth much more than that.


Naive question: Could one summarise this case as trafficking a "counterfeit" free download in CD format, or, alternatively, as trafficking a "counterfeit" free CD, where the reason the download or CD is "free" is because it contains software that cannot be run without an individual, nontransferable "activation code".

For example, software company distributes free CDs that contain copy of software, however software cannot be run without a non-transferable activation code. Unauthorised copying of printed label or contents of CD could be copyright infringement. Assuming it is, what are the damages? What is value of CD without activation code? (e.g. cost of the optical media) What is value of CD with activation code? (e.g. cost of the software license) Which measure is appropriate?


Not naive at all, that's exactly the situation and that's how the defense explained it to the courts. Lundgren copped to violating Dell's copyright right away. The value of the disc without the product key or license code or activation code, however you want to describe it, is basically in the convenience of not having to print it yourself.

Microsoft argued that the value was that of fully licensed software, ultimately $25 per disc, which is what refurbishers pay for new Windows licenses to install on computers, should they require them.


Your articles are incorrect and your journalistic standards are awful. Like, the one you link here, written on 4/25:

> Lundgren, by the way, is not some scammer looking to fleece a few people and make a quick buck. He has been a major figure on the e-waste scene, working to minimize the toxic wages of planned obsolescence and running a company of 100 to responsibly refurbish or recycle old computers and other devices.

From Microsoft:

> Part of Mr. Lundgren’s defense also involved claims that he was trying to provide the community with something that was freely available anyway. This claim was rejected by the district court and the Court of Appeals. This is because Microsoft itself sells genuine versions of these CDs to refurbishers (hence the market for selling counterfeit copies). In addition, Mr. Lundgren took great pains to disguise the counterfeit software he imported, including arranging for fake Microsoft and Dell labels to be applied to the discs.

> In an email sent in December of 2011, Mr. Lundgren said to his co-defendant,

> “You would have to be an expert with a magnifying glass to know and/or see such differences.” “You must have been trying to supply these units to Amazon directly or someone who is expert.”

> He went on to say,

> “C’mon Bob, you should be able to sell these units to anyone whom is not trying to sell them back to Bill Gates.”

> And,

> “Please sell some of these units. You MUST have some other buyers for this product – and if you do not, then find some. It has been months and I have not seen the return I was expecting to use for my India project buddy.”

> He concluded,

> “No normal company or buyer will notice such issues.” “Make me proud so that our business can grow and we can keep winning.”

> Mr. Lundgren also tried to evade U.S. Customs and coached his codefendant how to handle questions from federal agents. In 2011 he wrote:

> “There are tricks for bypassing customs with container’s & LTL but currently this is how I get these products without invoices past customs.”

> And, referring to customs officers:

> “If they call you just play stupid and tell them you ordered from an asset management broker overseas.”

> Mr. Lundgren and co-defendant Bob Wolff explicitly discussed deceiving people with the counterfeit software. In one email to Mr. Lundgren about the software he’s arranging to manufacture, Mr. Wolff writes:

> “If the software will be 98% accurate I believe I can get away with that.”

He was urging people to sell these discs as genuine and coaching them on how to lie if they got caught.


No one is disputing that he counterfeited the disc labels and committed a crime in doing so. The issue is that judges used a value provided by Microsoft for the discs that is counter to fact (license =/= recovery disc, counterfeit or not) and massively inflated his sentence as a result.


You said he's "not some scammer looking to fleece a few people and make a quick buck." Look at this e-mail:

https://blogs.microsoft.com/uploads/prod/sites/5/2018/04/Ema...

I have no idea how anyone, after reading this e-mail, can conclude that he was not trying to scam buyers into believing they were buying something other than counterfeit material, unawares, and then sell it to customers who were equally unaware they were buying counterfeits.

"Work hard and get these moved to any other buyer. No nomral company or buyer will notice such isuses and every month you spend sitting on this product is another month XP get's older and my assets become worth less." "I have not seen the return that I was expecting to use for my India project buddy." Those are Lundgren's _own words._ And nobody who read the article you wrote and linked to would have that context. They would, in fact, have your words to the opposite.


> The issue is that judges used a value provided by Microsoft for the discs that is counter to fact (license =/= recovery disc, counterfeit or not) and massively inflated his sentence as a result.

You don't understand Criminal Law if you believe that statement is true. Above a certain threshold, the sentence is more of a precedent and deterrence.


You can see how the sentence increases with the value in the chart at 2b1.1 (b)(1) here:

https://www.ussc.gov/guidelines/2015-guidelines-manual/2015-...

The value of the goods matters a great deal. The sentencing documents go into detail on it. The 11th court judge writes that the previous sentencing range, which he affirmed, was "largely based on a calculation that valued the infringed goods at $700,000." That put it in the range of 37-46 months, and prosecutors had threatened more early on when valuing the discs at $299 each. The plea deal took it down to 15.


Guidelines and base severity levels only specify a maximum sentence, with counterfeit goods crossing state and national boundaries 15 months is completely appropriate.


Wait, now your're saying that the value of the goods changes the sentencing guidelines but that doesn't matter? That seems weak.


I was all set not to believe you, but after I read Eric’s emails, I agree with you. It appears both MS and Eric are overstating their altruism.

Emails: https://blogs.microsoft.com/uploads/prod/sites/5/2018/04/2LU...


I don't see how Microsoft is overstating anything.

A) They didn't bring the case, US Customs did.

B) As the victim (financially) of the Crime they were approached to state the financial damage to decide on the restitution amount and they chose to pick the lowest price on market and further reduce that amount to depict their actual profitability for selling obsolete software.

C) Eric's intentions were clearly not to recycle and reduce waste but to profit from this racket of duping buyers into buying "genuine" recovery discs with Microsoft and Dell logos and tampered activation keys (read the court docket for more details).


The price they quoted was for a disc with a valid license. His discs didn't have licenses, so they were worth a few cents apiece.


> His discs didn't have licenses

That is where you're wrong. Read the docket, better yet here is a screenshot from the demonstration that the discs had keys replicated from original Dell recovery discs:

https://imgur.com/3eHjPjO

Moreover, "so they were worth a few cents apiece." - The value of financial damage (especially in this case) matters only towards deciding the restitution amount. They also have a cut-off, above which the crime is considered to be under federal jurisdiction which wouldn't have mattered in this case since the amount was obviously above the cut-off and the crime was of inter-state nature.


Looks like to me the normal error using a none oem disk with an oem key that is baked into bio


How can a Lenovo laptop have Dell's activation info baked into BIOS?

If the disk had no activation info, setup would have prompted for a key (trial keys for 30 day are available online).


It doesn't, it has Lenovo's SLIC in the BIOS. More than enough to activate Windows. Device manager would no doubt show it's a mess of not installed drivers though.

Big OEMs including Dell and Lenovo use an activation baked into the BIOS and a SLIC (system licence internal code) that's also in the BIOS. No activation required after restore from legitimate or otherwise CD or restore partition. It won't match the code on the machine's sticker, even if it's 100% legit just bought new from maker.

Search will turn up plenty on how SLIC works.


Lenovo's SLIC wouldn't load an invalid key that required them to then copy the key manually from COA on the laptop itself.


IIRC when the BIOS contains the activation data blob the discs are not manufacturer specific. There also used to be discs (at least in the windows 2000 times) that only checked for correct manufacturer name in DMI (or something similar), which obviously were manufacturer specific (AFAIK for a long time this is not possible).


The Dell-specific stuff would be on the disc. On page 32 you can see the gov operator has to input the Lenovo's COA key to activate the OS:

https://imgur.com/a/Ua7SLWo


The gov operator would also have to input a key during setup and OOBE if the disk did not have a tampered key/activation mechanism.


I haven't had to recover from an OEM vendor install in awhile, but if I remember right there are many situations where the user does not need to input the serial number for activation.


Windows Vista and up support reading device activation information from the system BIOS.

However, in this case you wouldn't see "Contact Dell for Support" on a lenovo laptop as demonstrated during the trial (see screenshot above).


The image gallery doesn't tell us if they were using a dell recovery cd or something else.


Yea .. seems kinda shady. Still, we see shady practices for people in large companies all the time. They've got an entire team of board members and crew to share in the process, so the result is almost always monetary compensation, fines, etc.

Maybe we should see more CEOs in jail in a similar manner, when their decisions to commit fraud intentionally causes the loss of savings and homes for so many average working class people?

In any case, we're seeing his small shop and his attempt to spin the case. I often feel like I'd never own my own business, because in a lot of cases, you have to make these types of risks and compromises to make it. Just look at the FedEx guy who gambled all his companies money to keep them solvent. Had he failed, he probably would have been prosecuted and jailed, but he made it, so he's praised for taking an insane risk at the cost of everyone he employed.


I don’t think there should be jail time for copyright infringement or counterfeiting (or any white collar crime for that matter). So there is definitely that angle; someone shouldn’t be going to jail for something like that.

That’s unfortunately not the angle WaPo and Tech Crunch ran with. They don’t question the over criminalization, but rather focus on the factual issue of whether he was conspiring to counterfeit or not.

If you haven’t, I recommend watching “I, Tonya.” Did Tonya Harding conspire to attack Nancy Kerrigan? You can definitely present a version of the story where she had no idea, as well as versions of the story where she participated directly. The movie does a great job of weaving in and highlighting the disputed facts in a way that conveys the ambiguity of the story.

Journalists often fall into the trap of taking one of those stories at face value. And I think that’s what happened here.

(Incidentally, this is quite typical in outrage porn stories intended to direct ire to the justice system. There’s almost always more to the story than the articles let on.)


I feel like you made valid points until you referenced the movie, "I, Tonya". The movie has no basis in the reality of what really happened. Tonya Harding knew, and pretended to be a victim and let other people take the fall. She knew, and you can portray anything in a movie, because it is made up and Hollywood is in the business of making money, not in getting things absolutely accurate.

http://www.oregonlive.com/portland/index.ssf/2018/02/i_was_t...

http://www.oregonlive.com/trending/2018/01/i_nauseated_the_o...

http://www.oregonlive.com/trending/2018/01/thanks_to_i_tonya...

Now honestly, maybe I'm being manipulated by these people in Oregon who were the ones dealing directly with the issue, but I find it incredibly hard to believe Tonya Harding considering the way she has acted back in the 90s and how she has acted now with this movie coming out. I'm sure her childhood was bad, that sucks. But she conspired to put a hit out on her competition in order to gain an advantage she felt she deserved because of her hardship.


So the first article is from the prosecutor on the case. Prosecutors don’t offer a plea deal for obstruction when they can prove conspiracy to commit aggravated assault. They just don’t.

That doesn’t mean she did it didn’t do it. As the movie points shows, she has a version of what happened, which she would’ve presented at trial. And that version might have been plausible enough to establish reasonable doubt. Journalists often get confused and report the defendant’s version of the story as what actually happened, causing folks like HN readers to wonder how the justice system can be so messed up.


> I don’t think there should be jail time for copyright infringement or counterfeiting (or any white collar crime for that matter)

I couldn't disagree more. This sounds like the basis for the creation (or I guess further entrenchment and worsening of) a two-tiered justice system.


> I don’t think there should be jail time for copyright infringement or counterfeiting (or any white collar crime for that matter)

So you don't think someone like Madoff deserves to be in prison?


I think that's an argument about first party versus third party fraud.


Agree. Though from my point of view I would say that the damage to Microsoft might not be the loss of sale (as the article points out, if those thing do not cost a quarter, they shouldn’t cost much more), but the reputational risk to Dell and Microsoft of someone printing disks with their logo on it which for all I know could contain viruses.


> if those thing do not cost a quarter, they shouldn’t cost much more)

The software on those discs cost a whole lot to make, you know? Try buying your pharma drugs for the $.20 it takes in raw material.


Those disks were unusable without a license. To get a license you need to pay Microsoft, not Eric. Please take your false equivalence somewhere else.


Far from being unusable, even without a valid license key, windows will work for 30 days IIRC. With some versions you can 're arm' the license for a total of 90 days of free use. In any case, the license you're talking about is the license to _use_ the software, distribution is a separate thing. Nobody except Microsoft is allowed to distribute the software. Just because they offer a download, that doesn't mean you can download and re-distribute it without their permission. Certain copyright licenses also block you from redistribution unless you provide the source code.

Even so, companies don't bother you with such trivial things as re-uploading an ISO that you downloaded off their website since its usually a waste of their time/money. I'm not sure why MS is even bothering with this case TBH.


They're a convenience and as such, cost something for commercial use. You can download Windows and create an image for personal use through Microsoft's own websites.

Windows 7: https://www.microsoft.com/en-us/software-download/windows7

Windows 10: https://www.microsoft.com/en-us/software-download/windows10I...

The "genuine" discs he sold had "pre-activated" installations which were clearly tampered with.

Just because the discs are unusable without a license (Which they weren't, as demonstrated during the trial and documented in the docket), it doesn't give him the right to use Microsoft and Dell Logo to cheat the buyers.

Please take your prejudice elsewhere.


Which they weren't, as demonstrated during the trial and documented in the docket

Well, they didn't seem to actually activate Windows. They only managed to active it using the laptop's original key, not furnished by the CDs guy.


> Well, they didn't seem to actually activate Windows.

That's exactly the point. After using the recovery disk on a lenovo laptop, the installation was loaded with activation info from Dell's original recovery disks.


The installation was activated with the laptop's COA. That's how they're meant to be used, as a re-installation medium where you re-authorize the OS with your original license key. If you don't have a key you have to buy one from MS.

The Dell stuff on the disc that made it onto the install was just a folder with like support links and stuff.

The install process is on page 31 here: https://blogs.microsoft.com/uploads/prod/sites/5/2018/04/2LU...


Go read Step 2. and 3. yourself

They used the key later to show that the activation never appeared on Microsoft's servers even when using a genuine key which clearly shows the disks were tampered.


But would it have worked on any Dell? Or was it just a useless key left from their master copy? And how do we know?


And for that you believe he should be put in prison for 15 months?

At most this should be a civil issue between 2 private parties where monetary damages are awarded, not a criminal case where a person faces prison times.


He shouldn't be in prison, but it's a well established bit of law that copyright infringement as a business is a criminal offence, and not just a civil tort. This is present is several jurisdictions.


> it's a well established bit of law that copyright infringement as a business is a criminal offence, and not just a civil tort

Can we have this kind of law for privacy infringement too, please?


We do have criminal laws protecting privacy, and they are enforced as long as the victim is a corporation or the government.


It was once civil, but corporations successfully externalised their enforcement costs on the tax payer by lobbying and rewriting the law to make it criminal.


The fact that something is "well established" does not make it ethical, moral or right.

I personally find it abhorrent when people use the justification of "well it is well established law" as if the law is written in stone, unchangeable, the word of a god and we just have to accept it.

No the law is wrong, the law should be changed, and this is an example if why it should be changed.

Copyright law need to be massively reformed and curbed. Intellectual Privilege is no longer with in its constitutional remit, i.e to Promote useful Arts and Sciences, and instead used to destroy those very things

---Edit: thanks for the downvotes I love how every day HN becomes more and more of a echo Chamber where anyone that disagrees with the popular (generally Pro Large Tech Company) narrative gets downvotes and has their voice suppressed since once a post get negative votes the "You are posting to fast" throttle kicks in and prevents the person from responding


Please don't comment on downvotes. It is what it is, and it can change if you wait.

In response, yes laws change. It was once well established that separate but equal was equal; and blacks could have their own bathrooms and drinking fountains. It was once legal to employee 13 year old boys as factory workers.

Disney's big items are well past their trademark expiration dates. Mickey Mouse should be public domain soon, but Disney is large enough they keep lobbying for laws that extend their IP well beyond what it should be.

We do need copyright reform, especially in cases like this where the physical disks aren't even made anymore.


[flagged]


No, it's in the guidelines:

> Please don't comment about the voting on comments. It never does any good, and it makes boring reading.

https://news.ycombinator.com/newsguidelines.html

aje403 6 months ago [flagged]

Blah blah blah, okay, but yes he should be in jail. He can choose not to counterfeit when he gets out if he wants to stay out


Prison should be reserved only for those that are a Physical Danger to others, not to punish people that may harm Corporate profits


What about thieves? If I break into a bank or a jewelry store and leave with million dollars worth of gold, then get caught. Should I just "restitute" the stolen goods and go back home? My only crime was to harm corporate profits, I didn't put anyone under physical danger. What about if I steal someone's car (not a corporation)? Does it change based on who you target (rather than based on the crime itself)? And if the only punishment is monetary, rather than jail time, does that mean committing a crime becomes a question of "can I afford to commit the crime and simply pay the fine?". Let's say I'm a millionaire that get its thrill from breaking into museum and stealing valuable art pieces. Are we just gonna ask him to give them back (if he ever get caught) and pay a "stealing" fee?


[flagged]


>>I think it's great that our country has strong deterrents against people clearly and deliberately going out of their way to make a living off copyright infringement.

and I think copyright itself is unethical and should be abolished completely, I am willing to accept/comprise and support a copyright of extreme limited duration covering an very small subset of useful arts and sciences for a duration of no more than 14 years to the original creator only (no corporations)

>The lazy entitled pseudologic neckbeard hivemind of this site is painful sometimes. Please stop.

I am a clean shaven libertarian that has never had a beard or any facial hair let alone a neckbeard.

>What if I decide to be a polite burglar who doesn't have any intention of hurting you? Can you leave me out of jail too?

Yes, if a person steals property that property can be replaced / victim made hole via restitution, it holds no value to society or the victim to place that person in a cage, a cage that also must be paid for by taking property of others in the form of taxation.

If someone takes $1,000 from me, I would much rather have $1,500 in restitution than $0 and the person go to jail


But it sure as shit might stop the next guy if all his friends keep getting put in jail, something very rare in white collar crime.

If I were Microsoft or any business needing to protect my IP rights, I would not care about a small reparation, I would care about it not having to go to court every 5 minutes because everyone and their mom is printing off fake CDs because it's not getting adequately deterred by the justice system.

Seriously, if you want to bitch about our justice system or even our copyright laws you have WAY WAY lower hanging fruit than this to base a coherent argument around

Nvm: re-read your posts, Windows should not have a copyright on these disks, I do not exist in the same universe as you


>>If I were Microsoft or any business needing to protect my IP rights

And this is the main disconnect, I do not accept the concept of "intellectual property" or believe it is a right.

Microsoft should not be given a "right" by the government to control in what order I instruct my hard drive or cd burner to arrange a series of 1's and 0's. Doing so is an actual violation of my physical property rights as the owner of said hard drive

aje403 6 months ago [flagged]

Let's make it clear that Microsoft has rights on Windows, their brand and suite of products, not operating systems in general. The problem comes from when a malicious 3rd party explicitly paints Windows on the disc full of 0s and 1s to fool the consumer deliberately into believing its a genuine product. Microsoft not only loses revenue but it assumes brand liability

You did not invent a single thing you are using right now and the delusional dream world with no ip in which people like you wish to exist, a hard drive was never invented in the first place. If you want to argue some of them need to be reformed, sure, that's obvious to everyone who reads the news once in awhile, but everything else indicates you are the originally intended reason for why the electoral college exists


You've repeatedly posted uncivil and unsubstantive comments, engaged in flamewars, and now crossed into personal attack. We've already had to warn you repeatedly about this.

If you can't or won't stop, we're going to ban you, so would you please (re-)read https://news.ycombinator.com/newsguidelines.html and stop doing these things on HN?


Who writes that law?


You shouldn't be downvoted for stating something that's obviously true: the IP industry has huge amounts of influence and they've been sucessful at driving legal change.

This includes making commercial copyright violation a criminal, rather than civil, offence. It also includes things like making circumvention of technical protection measure illegal.

It's wide ranging, it removes freedoms, it causes economic harm.


> This includes making commercial copyright violation a criminal, rather than civil, offence. It also includes things like making circumvention of technical protection measure illegal.

> It's wide ranging, it removes freedoms, it causes economic harm.

And how exactly is that? The government didn't go after him because he was distributing pirated media or software to his friends but he set up a manufacturing unit, deceived customs to profit off the operations. Not to "recycle and reduce waste", not to help you or me.


You want to carrier-unlock your phone? Might be illegal where you are.

You want to back-up DVD or bluray discs? Might be illegal where you are.

You want to format shift CD to MP3? Might be illegal where you are.

You bought thousands of CDs, and want to pay a service to format shift them to MP3? Probably illegal.

etc etc etc.


For most jurisdictions, an act is "criminal" if you have mens rea (malicious intent) and actus reus (malicious act).

You never see someone getting locked up or fined for copying discs for personal use. All of the cases that I'm aware of involved distribution and profiting.

The measures were intended to deter those profiting off the work of others like in this case. Although, I agree that the legal approach sets a bad precedent and unfortunate collateral damage to people who genuinely buy something and face the same deterrence when they really don't have any malicious intent.


> You never see someone getting locked up or fined for copying discs for personal use. All of the cases that I'm aware of involved distribution and profiting.

Because in most places there's a distinction between copyright infringement done as part of trade and copyright infringement for personal use - which is what I said in parent post.


Thanks. Agreed on all points.


It is not useful to discuss about the law on a forum on the internet, at least not yet. Still...

Counterfeiting is an act that is similar to theft, apparent from the fact that this guy has succeeded in making money from what Microsoft gave birth to, and therefore owned [1]. The relation between the guy and Microsoft is clearly a parasitic one.

Microsoft would be compensated justly if they were simply just awarding the monetary damage back by the damaging parties, here Eric Lundgren and his co-defendants. However, it would not be just against the community* (which includes Microsoft, but also everyone else) to let the damaging parties go away without deterring them from doing such actions further. Otherwise, the damaging parties may continue living off their lives through damaging, simply because it is almost certain that there will be cases where they will make profit without being detected and required to award the damages back.

Another way to explain the situation is this: If they are not made to pay more than the damage they have caused, their worst-case (for them, not us/community) profit is 0, and for all the other cases they will be making profit. Should this really be the justice cast upon the individuals causing monetary damage?

[1]: Declaring creators as the (copyright) owners benefits the community, hence we do. The relevant example Windows is a product of Microsoft that benefits the community, evident from the fact that it has a userbase. Microsoft would not create and offer Windows to the public, if the law allowed everyone to freely redistribute their products, and compete with Microsoft using their creation, as it would render their novel efforts meaningless against the much simpler effort of copying products created by the others.

[*]: Edited from "robbery".


With all due respect, your view is biased to the point of delusion.

Counterfeiting never was and never will be similar to robbery. Robbery results in someone being deprived of their property. No one has been deprived of their property. In fact, as information, the victim in this case couldn't deprive Microsoft and OEMs of their property unless he deleted every single copy of the software.

Furthermore, the "counterfeit" software is an exact replica of what is provided by OEMs. There was no harm done to society.

I agree with others here: Any prison time is too long, let alone 15 months. Our society needs to take a long hard look at our laws because frankly, we're well on our way within the realm of the absurd.


> No one has been deprived of their property.

On the contrary, money is a means to property, and Microsoft loses $3.5 (minus the production cost) for each copy Eric sells to his buyers, since otherwise Microsoft would be the one earning that money. The crime of theft, however, predates even this buying & selling.

Software is a non-depleting product. It is like the fruits that immediately regrow when plucked off of its tree. Now, just because Microsoft doesn't lose any fruits when somebody plucks a fruit from their tree without permission, shouldn't make this person not guilty of their theft. Eric, I would say, has committed this crime of theft at the point of copying the software. Microsoft may not have been deprived of their property, but that is merely due to the fact that their miraculous tree was capable of immediate replenishment, not because a fruit from it was not stolen.

Eric later benefited from his crime by selling it, which damaged Microsoft by saturating the demand for their product as a side-effect.

In the end, it really is hard not to think counterfeiting as a form of stealing, when any form of counterfeiting most definitely devaluates the properties owned by the genuine owners. I am not an expert on law, economics, or business, but I would say counterfeiting in any form would most likely indirectly equal to stealing, and doesn't look like it at the first sight because the translation is too convoluted.


Microsoft loses $3.5 (minus the production cost) for each copy Eric sells to his buyers, since otherwise Microsoft would be the one earning that money

Considering that Microsoft wasn't selling those disks before he came around, and isn't selling them now, how can they be losing money on the disks?

If I managed to find someone to pay to get a copy of your post, would that mean you'd lose money?


> If I managed to find someone to pay to get a copy of your post, would that mean you'd lose money?

Indeed, I would be losing a non-negative amount (call it X) of money that I could have earned, if you were to commit that crime. You should rather ask me for my permission. I will then have my options to lend you my copyright either for free (X = 0), for $y (X = $y), or not allow you to do so at all. If you do it anyway, then my losses would be at least the amount you sell it for; I might have been planning to sell it for more when the demand rises.

I am not sure if I am immediately granted such a copyright for my comments here, though.


But you are already distributing your comments for $0! How can selling them for any amount be harmful to your future goal of selling them, compared to that? And the same applies to MS, who distributes the CD images for free on their site.

PS: You are granted copyright over your comments, as per the Berne convention.


I think comparing counterfeiting to robbery is just plain wrong. The definition of robbery is taking something by force/threat of force/fear. Comparing counterfeiting to theft is at least closer even though I think comparing IP crimes to theft is a bit dubious (not saying IP crimes are any less of a crime for that matter!).


Excuse me for choosing the word robbery. I was not aware that it meant something different than theft. Did not realize that the different words for stealing implied different contexts. I have edited my comment accordingly.



> The relation between the guy and Microsoft is clearly a parasitic one.

You could say the same about anyone trying to repair or extend the life of products... Does that mean that it should be punishable? Should the law really be protecting Microsoft's bottom line at all cost?

It is clear to anyone not distracted by pedantic legal interpretations and who can actually comprehend the difference between information and material goods, that the accusation of "counterfeiting" is a tenuous and misleading one.

Take a moment to go beyond the premise of "counterfeit == damages" and find out what that really means in this context, it doesn't take much effort: these are recovery discs, any real monetary "damage" done to Microsoft's bottom line would be the same as if every one of Microsoft's customers were ensured their right to restore the software to their computer when it failed, disregarding misplacing or never receiving or it being relegated to a long since corrupted partition (yes people can download it but most people are not technically competent and it's not in Microsoft's interest to spell it out to them)... this was already paid for by the license, they have every right to that disc and the disc alone does not give anyone the ability to install without a license.

These are the only substantial monetary damages, and this flimsy verdict is damning because it could potentially be interpreted as a precedent to attack anyone helping people to repair computers... but ya know... how dare you hurt M$ bottom line.

And before anyone brings up the straw man of "he profited"... on 25c per disc? really? after flying to china and back and putting all the work in to get them mass produced? I doubt he would have ever broke even, at best he might have made a meagre living, it's not exactly counterfeiting Rolex. I don't claim to know the intent of this guy but it can only be one of two: He was trying to help extend the life of countless computers needlessly thrown away every year, OR he was an idiot with delusions of grandeur, because there is no money in this (but don't confuse that with the ability to harm M$ bottom line, a cardinal sin). Don't get me wrong, I think what he did was pretty stupid, but what Microsoft is doing right here is sending a message of "If you hurt our bottom line, we will hurt you personally", regardless of their legal or moral right to do so.


> And before anyone brings up the straw man of "he profited"... on 25c per disc?

Sorry, I could not find any resource where it says that he was profiting 25c per disc. I have found some others stating that he would be covering his expenses if he were to sell them for 25c each, and then the blog post from Microsoft states that he was selling them for $3.5 each. It really makes more sense that each disc costs 25c when mass-duplicated in China, than $3.25.

You already have already shunned this argument with your "straw man" talk. Would be a shame to step back just because you've laid that trap-threat to whoever replies. Here it goes: From what I've found, I'd say he profits $3.25 per disc and not 25c. The blog post from Microsoft also states that he made a revenue of $92,000 from this counterfeiting business. Here comes your straw man: $92,000 * ($3.25 / $3.50), approximately $85.500 is what he profited.

I don't know how much an average HN user is gaining, but that is a lot of money for me.

The argument on him being a selfless recycler is impossible to believe in, as the evidence shows that he labelled those discs to look like original Dell recovery discs. This leaves us either nothing but him being an "idiot with delusions of grandeur" as you've said, or he really was simply just making money out of this.


Fair enough I only saw the 25c price not the "$3.25", however I cannot find the $92,000 figure, where did they pull that from? i'm wondering if they are mincing "business revenue" with "counterfeit revenue", they seemed happy enough to mix physical goods fraud terms to IP and not the reverse so I wouldn't put it past them.

In the article the only reference to making more than 25c per disc is:

> Records, however, show that Lundgren had sold several thousand to one buyer for $3-4 each

But "several thousand" * ~$3 doesn't sound much like 92k.

> I don't know how much an average HN user is gaining, but that is a lot of money for me.

Me too, but note that the term revenue is often used ambiguously and does not necessarily refer to net income, often people abuse this to inflate or deflate the number to help their narrative. _If_ that is the case here then 90k gross for a sole proprietor could be quite a low income depending on the margin... then again if this figure is really all about the discs, then ~90k - (flights + manufacturing run + shipping) could be quite profitable.

I can't find the real figures, happy if someone can enlighten us.

To be honest I don't have much empathy with this guy i'm just playing devils advocate now... My main argument was against your implication that hurting a business's revenue is automatically illegal, which is very close to saying capitalism is law. Perhaps you didn't realize you were implying that. The fact that this guy may or may not have profited from this is separate from the legality of the impact of restoring bought and paid for software against microsoft's profits, it's an important distinction.

Again just to be clear: Microsoft's loss should have no bearing on this case (because they are legal), the case is about someone potentially making money off something they shouldn't, much like selling GNU software (I know that comparison seems rediculous but I'm trying to highlight the separation of illegal profit from legal losses).


>>Microsoft would not create and offer Windows to the public, if the law allowed everyone to freely redistribute their products, and compete with Microsoft using their creation, as it would render their novel efforts meaningless against the much simpler effort of copying products created by the others.

So you believe Microsoft does not create any software that is allowed to be Freely redistributed and Open Source software does not exist at all, anywhere in the world.

>>Counterfeiting is an act that is similar to robbery

No it is not an act or even remotely similar to robbery. Further creating a Restore CD is not an act of Counterfeiting.

>apparent from the fact that this guy has succeeded in making money from what Microsoft gave birth to, and therefore owned

That is not the definition of counterfeiting, thus the fact the guy "succeeded in making money from what Microsoft gave birth to" does not establish counterfeiting. Hell if that was the definition every person that ever made money supporting, installing, etc the windows operating system would be "counterfeiting" it given they "succeeded in making money from what Microsoft gave birth to"

>Microsoft would be compensated justly if they were simply just awarding the monetary damage back by the damaging parties, here Eric Lundgren and his co-defendants.

Microsoft was justly compensated when they sold the orginal licence for the orgianal computer on which the Restore CD's where designed to Restore.

Microsoft now however wants to Double Dip and charge refurbishers for a 2nd license on for the same hardware, that is not just compensation that IMO should be considered fraud, and be illegal.

When Dell, HP, Lenovo ect sell a windows computer, they buy and resell a license to use that version of windows for the lifetime of the product/computer. A person restoring that system back to its OEM state should not have to rebuy that license from MS to preform that restoration. MS wants these recyclers to pay them $25 for a license the OEM already paid MS for.


> Microsoft now however wants to Double Dip and charge refurbishers for a 2nd license on for the same hardware, that is not just compensation that IMO should be considered fraud, and be illegal.

This part i missed... is this true? do Microsoft actually charge refurbisher? Aren't licensed supposed to be for machines not people. They seem intent on stamping the damn thing on the side of all machines.


Yes, as stated in thier blog https://blogs.microsoft.com/on-the-issues/2018/04/27/the-fac... >>When a refurbisher installs a fresh version of Windows on a refurbished PC, we charge a discounted rate of $25 for the software and a new license – it is not free. Thousands of refurbishers participate in this program legally without confusion, and the program works.


Regarding the "profit": Microsoft conveniently leaves out the part where Eric was planning to sell the disks for $0.25 each - just enough to cover the cost of creating them. Severely disingenuous of Microsoft to spin this as "to generate income for himself" in any meaningful sense if you ask me.


After further reading, I'm a little less convinced. The $0.25 number comes from the 2nd paragraph of the April 25 2018 Techspot article [1]. According to arsTechnica [2] he would spend $80,000 for the disks. 28,000 disks were seized, so if these are the facts he's losing about $2.40 per disk. Seems like either he is not profiting, or there was some higher price negotiated but the government couldn't prove it well enough to get a conviction, or there were a lot more disks hiding somewhere else.

[1]https://www.techspot.com/news/74324-e-waste-recycler-eric-lu...

[2]https://arstechnica.com/tech-policy/2018/04/why-the-man-who-...


And when Eric talks about how he was planning on selling the discs for $0.25, he's conveniently leaving out how he was selling the discs for $4.00. This is directly from the appeals document.

"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."


yes, nobody disagrees he was profiting. but he was doing so in a more ethical way than Microsoft profited to created this ecosystem where he can even do this kind of business: monopoly oem coercion.

had microsoft not forced everyone who buys a computer pay for windows and a license sticker without proper restore medias, he wouldn't have a market to sell conveniently packaged restore discs.

as far as the law and my tax should be concerned, courts should have been solving the ecosystem creation problem, not some small fish that is a consequence of it.


The TechCrunch article completely ignores huge chunks of the Microsoft post. The emails (https://blogs.microsoft.com/uploads/prod/sites/5/2018/04/Ema...) from Eric are pretty damning. He makes it obvious he’s trying to evade customs, that he’s trying to mislead wholesale buyers into thinking the discs come from Microsoft, and that he’s not happy about the amount of money he’s making.


At most this should be a civil issue between 2 private parties where monetary damages are awarded, not a criminal case where a person faces prison times.


Nobody disagrees that he is profiting. But he is only profiting off the fact that Microsoft makes it very difficult for you to re-install software that you already have a license for, particularly if you didn't save your OEM install disk.

The actual moral crime here is that Microsoft profits off the fact that users don't know they still own the original license they purchased, and/or there is a huge hassle in getting a new OEM disk. If Microsoft wasn't doing this then there would be no "black market" for it.


(I don't think he should have got prison time for this crime.)

It's useful to read the emails from the defendant.

He's not just burning re-installation DVDs. He's going out of his way to burn re-installation DVDs that are identical to MS / Dell supplied discs, even down to holograms in the disc.

Customers were rejecting the discs because they were "counterfeit". He was saying things like "tell him the product is guaranteed to be real". "Customs can't tell the difference and therefore is not legally allowed to hold them hehe"

https://blogs.microsoft.com/uploads/prod/sites/5/2018/04/2LU...

But that document also shows people test installing the OSs onto different computers, and it shows them using the licence sticker on the machine to activate one of the OSs. I'm not sure that was made clear to the judge: the machines are licenced, and if the machines aren't licenced the supplied discs won't activate. So, I wonder how the discs were being sold. "These discs are licenced, and you won't have problems with activation" would be bad.

EDIT: in general, when you're ending emails to people describing how you're going to evade customs you're probably doing something wrong, and know that you're doing something wrong.


The copyright infringement on the packaging is blatant, but valuing recovery disks as full operating system installers is an equally blatant lie.


MS valued them at $20 each.

He attempted to sell some of them for more than that.


MS values replacement disks for Win 7 Pro at twice that.


In this case MS put a value of $20 per disc. The prosecution put a value of $25 per disc - that's the cost to refurbishers of the MS supplied discs. The defence tried to claim that the discs are worthless without the licence, and should be valued at either nothing or $3 each. That defence failed because he spent $80,000 creating the counterfeit product, and you don't spend that much money on worthless items.


People spend money on "worthless" things all the time, and as a person who wants to reduce e-waste Eric would have plenty reason to spend something like $80000 to further his goal (whether his belief is justified or not). He made 28,000 disks for $80000. That is $2.85 per disk. $3 is a perfectly reasonable value.


Is this spin or not?

“This case involves our program to partner with businesses that refurbish PCs. These businesses typically purchase used PCs, wipe them clean of all software, install a fresh version of Windows and sell the refurbished PCs with new software to new customers. When a refurbisher installs a fresh version of Windows on a refurbished PC, we charge a discounted rate of $25 for the software and a new license – it is not free. Thousands of refurbishers participate in this program legally without confusion, and the program works.”

The wording here is a bit tricky. What is a “fresh” version of Windows, what makes the software “new” and is a new license actually required or not?

Restoring the original version of Windows would not require a new license. A so-called “fresh” version however would. These are meaningless terms when it comes to the bits and bytes of WinXP SP3.

I think - totally guessing - this is the difference between a system restore which would include any original bloatware and perhaps no SP updates - vs a clean install with no bloatware and maybe bundling the SP3 with it...

I could see how a “fresh” install which didn’t use the original recovery disk, being sold to a 3rd party as part of a certified refurb program, might require some additional license which Microsoft sells for $25.

I know that the original purchaser can absolutely wipe and reinstall a fresh copy of Windows without recovery media because it’s the first thing I always do when getting a new machine to eliminate any possible bloatwaes.

Is the original license supposed to carry over to a fresh install being made by a refurbisher while preparing the unit for resale?


The original license carries over if the computer-to-be-refurbished has the Certificate of Authenticity and the original restore media. This is per Microsoft's refurbishing guidelines.

http://download.microsoft.com/download/F/5/5/F5549310-DBCE-4...

If either one of those is missing, the computer needs to be relicensed for $25, which is the special price that Microsoft makes available for refurbishers and which Microsoft used to value the damages for Lundgren, as he was selling the discs for refurbishers.


There is no spin here. The fellow is remorseless and distributed software that he did not own, nor was lecensed to distribute, violating the license agreements of both Dell and Microsoft.

No sympathy here. Also, clickbait headline.


The fact that this is a criminal offense is what is right and truly fucked up.


He was making discs designed to intentionally deceive customers into thinking they were genuine discs from Dell and Microsoft, and doing it for profit. Isn't that classic criminal fraud?


I don't see why they should put up with someone else manufacturing Microsoft-branded discs and distributing them.


It was a screwup on his part to duplicate the trademarks. Should have just been 'repairco's windows 7 reinstallation discs for old dells' or something to that effect.

If its a major OEM machine like dell/lenovo/hp, there are OEM specific keys in the BIOS. This is why they use manufacturer cd's and not retail ones (fairly certain you can't use microsoft downloaded iso for an oem, but correct me if wrong) You need a certificate component, the bios slic strings, and a OEM key off the coa: http://www.squidworks.net/2015/03/how-to-windows-7-oem-activ...

Point being, if the OEM stopped providing the discs and he only charged to cover costs of the medium without profiting I fail to see Microsoft's logic here.

EDIT: I stand corrected, they weren't selling these discs for a quarter as articles reported.


He didn't just duplicate the trademarks. He went out of his way to make the discs identical to the real discs. Some of his product was rejected by his customer because they were not identical.

> he only charged to cover costs of the medium without profiting

This was a profit making venture. You can see his invoices here: https://blogs.microsoft.com/uploads/prod/sites/5/2018/04/2LU...


Thanks for that. Tech jouralism really is dead I guess.

In the articles I read nobody seemed to know you need an OEM cert to activate an OEM key and nobody bothered to read the exhibit where they talk about ebay'ing discs for $30-$40 and getting a steady cash stream.


> fairly certain you can't use Microsoft downloaded iso for an oem

ISOs downloaded through Microsoft's Windows Media Creation Tool [1] will read the product key from the BIOS of OEM PCs that were sold with Windows 10 and will auto-activate when connected to the Internet.

[1] https://www.microsoft.com/en-gb/software-download/windows10


Yeah that's for Windows 10 (and 8)with UEFI and secureboot. This is a recycler and the systems described are mostly win7 and xp sp3. I don't think that installer will work for SLIC OEM keys in oldskool bios.


BIOS embedded Lic started to appear with windows 7. Windows XP did not have have BIOS embedded Software Licenses but windows 7 did via some vendors (Dell was one of them)


I'm aware and being careful to distinguish retail from large OEM's. The large OEM's had embedded strings in their bios (SLIC/SLP), a cert on the installer, and a coa slapped on the case somewhere

Vista had slic keys as well. XP had SLP oem keys which I'm a bit less familiar with. This site is like a black hole of messy information on the topic: http://dellwindowsreinstallationguide.com/

Somewhere deep in the bowels of it is a section on how to tell which version of windows (xp/vista/7) your oem system is licensed up to. It involves using rw-everything and looking at sliic table version. I have upgraded a dell vista system to a valid 7 license in the past by doing official bios update (updates the slic version) and doing a clean install.


> It involves using rw-everything and looking at SLIC table version.

There's a much easier method that automates all of that for you: the Multi-OEM/Retail Project (MRP) [1]. This queries the SLIC or MSDM tables for you during the installation of Windows and enables you to create a single DVD or USB drive that works with OEM PCs from 131 different manufacturers.

All you have to do is copy the included '$oem$' folder to the 'sources' folder of your Windows 10, 8.x, 7 or Windows Vista ISO/USB and it takes care of the rest.

The MRP is designed to determine what motherboard manufacturer is fitted and find the DMI, (board information), to then check against a database to pick the right theme, logo's etc. Along side this, if the computer has either a MSDM key or SLIC within the bios, to check that against the database and attempt to allow LEGAL activation as the Computer's OEM suppliers would do. For those with a Windows 10 Digital Licence (HWID), or MSDM key your computer should auto-activate when you go online, providing you have installed the correct Edition for the HWID/MSDM key.

[1] https://forums.mydigitallife.net/threads/multi-oem-retail-pr...


Aren't Win10 licenses tied to both the serial in the UEFI and the CPU ID (so if you need to replace one or the other, it will still activate?)


Because laws and the consequences for breaking some of them are often morally questionable to a large portion of society. Compounding that, the judiciaries' understanding of esoteric technical topics can be sub-par, and a juries' interpretation can be as predictable as a coin-toss.

That's all to say that, when you are contributing to robbing someone of their freedom, you'd better have a darn good reason for doing so. In this instance, I think many would arrive at the conclusion that Microsoft did not.


They shouldn't. But criminal penalties? Jail time? Are you kidding?


Well, it was a commercial, for profit enterprise.


Let's assume the ffg scenarios:

* Some people don't know how to download ISO files from the internet. Or even how to use them

* Some have poor internet / limited bandwidth

* Their laptops isn't booting and don't want their files wiped by recovery mode

If a technician is to provide repair discs to people in this scenario - no Windows Keys - should the technician customers this disc for free?


This "thought experiment" has nothing to with the case at hand i.e. selling counterfeit recovery disks with identical labels and marking for profit.


Damn how much jail time has Microsoft done for the stuff they've been found guilty of?


I didn't expect people to be so reasonable about this. Kudos. The guy was obviously trying to counterfeit discs. Not every copyright action is a double plus bad DMCA internet sin.

That being said, it is indicative of how complex OS licensing is that there are so many questions in this thread about how licenses are granted and transferred. At some point, MS will need to be making enough money from the cloud that they can drop this licensing model. It wont be soon, though. Windows revenue bwas up in the last earnings report.


Microsoft's incomprehensible licensing is a huge part of their business model. They rely on no one (not even their own experts) being able to understand it as a form of leverage.


It's not just Microsoft doing that, by the way. I've really been taken aback recently as I learned more about how licensing is done at an enterprise scale.

That being said, it's business to business stuff...so, while they have leverage, they can't use it all because that would end in litigation. In most cases they want ongoing revenue so some things are just granted.

It's a strange way of doing things, that's for sure, but so are most things in big business.


Im sad that he got jail time, but this guy was distributing end-of-life vulnerable operating systems. These are very dangerous and no longer updated. Forcing old machines to run closed-source outdated operating systems, which put the user at a real risk of compromise -- maybe we should look at regulations here. Windows XP is not suitable or safe to use today. This isn't about recycling, its no longer fit for purpose online.

If he had shipped it with say, a supported Ubuntu, there would be no issue and the users would be protected.


I'm happy he got jail time after having read those emails.

This guy was intentionally creating "fake" Windows recovery discs with Microsoft and Dell logos and searching for unscrupulous buyers that would not notice the small defects and pay him market rate of $25 of a genuine product for something he copied (presumably for less than $2) in China.

Over that all, he had the guts to ignore US Customs seizure notice about his illegal activities and to moreover email is codefendant that "they're non-technical people and have no proof against us".


when I first came across this story last week, there was some HEAVY spin that he was an environmentalist just doing his piece to save old technology. I've since read all of the emails, and that's definitely not what he was doing. That may have been his original intention or a very very small part of his motivation, but this was a money making venture from the get go. There's no doubt about it.


Actually, if you check the date on some of the emails, they were in 2011, well before the end of security updates for windows xp (which was in 2014)


Previous discussion:

https://news.ycombinator.com/item?id=16921634

As said there, it seems like the Courts treated the case as being counterfeit goods, not really copyright or software:

https://news.ycombinator.com/item?id=16922098


The statute requires that the copies exceed $2,500 in value.

https://www.justice.gov/usam/criminal-resource-manual-1847-c...

Hypothetically, if Microsoft had conceded that the value of the CDs was only the value of the optical media[1], then what if Lundgren had only imported $2,500 worth of CDs? How many blank CDs can one purchase for $2,500?

If the prosecutor lacks evidence that the value of the goods exceeds $2,500 then will she still pursue the case? Would it be dismissed? What if she loses? Will that affect her career? Who can she use as an expert to provide evidence that the goods exceed $2,500 in value? Does she have to ask Microsoft for evidence? Why or why not?

1. For example, one argument might be that there was no value to the software stored on the media because it would not run without purchasing a license, e.g. by buying a computer with Windows pre-instealled by an OEM


I'm not sure you can use the serial on the sticker of a refurbished PC. The sticker is not a license as well as the serial on this sticker is not an OS license.

The original license holder cannot transfer the OS license (unless a company is being bought by other company) so using the serial on the sticker of a refurbished PC by the new owner is generally illegal.

Probably the damages for MS come from refurbishers "assisting" their customers to install OS from repair CDs using serials from stickers left from previous PC owners -- clearly not legal.


Source for this clearly not being legal? From my knowledge, OEM licenses allow exactly that: transfer a PC and the license transfers with it, unless the motherboard is changed. In contrast full retail licenses can be freely transferred between PCs, and volume licenses are bound to a company, but can be moved between PCs owned by it.

But of course it's possible they limited that at some point, and nobody would accuse Microsoft licensing of being transparent.

EDIT: it's just microsoft support forums, but one reference in support of "the license is tied to the motherboard": https://answers.microsoft.com/en-us/windows/forum/windows_10...


I would say this really depends on the jurisdiction. Microsoft can put whatever nonsense they want in the EULA. For example, the original owner can't transfer the license to a new owner. As I've understood it, that shit doesn't fly in EU, and still might be questionable in parts of the US: https://www.techdirt.com/articles/20120703/11345519566/eu-co...


> Probably the damages for MS come from refurbishers "assisting" their customers to install OS from repair CDs using serials from stickers left from previous PC owners -- clearly not legal.

Is this true? By this logic every PC bought on craigslist would need a new Windows license. I think the license follows the computer not the user, thus you can't transfer a license between machines but it is valid for the original machine it was purchased for. Maybe not relicensing Windows after purchasing a used machine is illegal-- I don't know, but virtually no one does this and likely only pay Microsoft if they need to upgrade from a previous version not covered by the original license.


Hang on, I thought OEM Windows licenses were nontransferable between computers, not between owners?


I think you're right. You can always sell your PC and that includes the license (and for OEMs, Microsoft ties that license to the hardware; typically the UEFI serial or the CPU ID). That can technically be enforced at the hardware level.

But before they did that, you could peel off your case serial number, install Win XP on another machine and sell your old one blank. Is this violating your license? I'm honestly not sure, but we did it all the time.

Also if we didn't have an XP key, we'd often go to Staples and write them down off the store units.


Seems somewhat irrelevant, he was sentenced for selling ”counterfeit software” but what he sold was fake branded recovery discs. That is to say he sold a tool that could put the operating system into a working state, not cracked install cds.


I see people repeat this lie often, it is completely false

the OEM Licensees is tied to the Mainboard of the System, it is forever linked to that Mainboard, you can transfer that mainboard to other owners with out issue and it is still a licensed copy of windows.

Please stop spreading this lie


> The original license holder cannot transfer the OS license (unless a company is being bought by other company) so using the serial on the sticker of a refurbished PC by the new owner is generally illegal.

Wow. That's godawful if true.


Before the law some legal persons are more equal than other legal persons.

This seems to be yet another case of non-natural legal persons having more rights than natural persons.

Whenever in 'doubt', rule in favor of the more generous tithe collector...


Should have put Ubuntu on those refurbished pc's man!


I just think it’s comforting that good old asshole microsoft is back in the game, no need to painstakingly reconsider my opinion of their business practices now!


While some part of MS is moving in a more progressive direction, the main part with the Windows and Office products is the same as always: unfree licenses and evilcorp business methods. If MS truly wants to wash away the asshole label, they should clearly move away from past licenses for all their products - then this whole affair with the counterfeit would have been a non-issue.

Once Windows etc comes with a free license, MS will indeed not be called assholes.


You can't really sum up Microsoft into one "asshole microsoft". For example their OSS products are made by awesome people that work in good divisions, and to be honest, making their work open source seems to be an attempt to not let other MS divisions (e.g. legal) fuck up their good work.

There is no catch in their licenses (unlike Facebook had with React). Please don't judge products such as TypeScript by this.


Reminding me that typescript is from the same makers as sharepoint and office356 doesn’t bring my esteem of sharepoint up, if you know what I’m saying. What comes to mind is more the stories from when oracle bought sun, but don’t worry: I don’t want to write javascript anyway.


Sounds like they haven't learned anything at all from the MikeRoweSoft case.

https://en.wikipedia.org/wiki/Microsoft_vs._MikeRoweSoft




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