Microsoft helped imprison a man for ‘counterfeiting’ software it gives away free (opens in new tab)

> So Microsoft lied to the US government about the value of what was being "stolen", and got the US government to foot the bill of prosecuting the case.

Source for that?

Microsoft is clearly denying this, so who is right?:

> "Microsoft did not bring this case: U.S. Customs referred the case to federal prosecutors after intercepting shipments of counterfeit software imported from China by Mr. Lundgren."

and

> "Customs authorities referred the case to federal prosecutors. The United States Attorney’s Office in Miami pressed charges and Mr. Lundgren pleaded guilty. Microsoft was called as an expert witness toward the end of the legal proceedings. "

From: https://blogs.microsoft.com/on-the-issues/2018/04/27/the-fac...

Louis Rossman did an interview with Lundgren on his YouTube Channel. Lundgren is no hero. He was not just burning some recovery CDs. He was actively seeking to deceive, actively telling his customers (other PC recyclers) that he was selling them legitimate recovery CDs manufactured by Dell, Lenovo, etc. Microsoft did not go to the government. The government went to Microsoft. It called Microsoft people as expert witnesses. Microsoft did not claim the CDs Lundgren sold were worth $25. They said that they sell versions of Windows with licenses for refurbishers for $25, but don't sell license-free recovery CDs.

The standard used to determine damages for counterfeit goods (which is what we're dealing with, not copyright infringement or trademark violation but counterfeit goods, no different than if he setup a production like to produce Prada bags and told people they were Prada bags) is NOT exact equivalence. It is substantial similarity. And the court, not Microsoft, looked at Lundgrens claim that he spent tens of thousands of dollars producing worthless CDs that he then expected to make a profit selling and saw that it was a nonsensical lie. The only other number the court had was the $25 one from Microsoft. Read the appellate courts ruling. It's not a difficult read. It's very clear.

> That is the purpose of civil court- to penalize wrongdoing by companies.

That's kind of a confused notion of the purpose of the distinction between civil and criminal court.s

There is a broader push to criminalize IP enforcement.

Part of a very troubling trend.

And who's it done for? Large corporations. Not the "little guy".

Rent seekers, consolidating their monopolies.

And those arguments would fit with what he actually pleaded guilty to - copying the designs of the recovery disks and making them look legitimate. They aren't arguments (but IANAJ) that claim the software is e.g. legitimate windows installations.

He was sentenced for software piracy or thereabouts, but he literally can't do that because windows is not a physical disk, but a license. He did not sell licenses. The discs, as was stated as such by expert witnesses, were worthless. The contents were freely downloaded from Microsoft itself.

Of course, there might be a clause on the website that you can't burn those images and sell them. But those can't be tied to a monetary value because the images were distributed for free.

I'm replying to my own comment to note that he claims these documents are not authentic, and were forged by a former business partner who wanted to cut a better deal for himself. He says the government took all his computers, lost all his computers, and found the doctored emails on the partner's computer. He says he no longer had access to the mail server. He isn't super clear on the specifics of what's forged and what's not, beyond that the prices are forged. He doesn't seriously question that he intended customers to mistake the CDs for factory originals.

https://www.youtube.com/watch?v=S7hnVYMoctM&feature=youtu.be...

Pretty weird--like, if this guy is going away on forged evidence, then isn't that a bigger story than the questionable valuation? But the alternative is that he's more or less a compulsive liar. You can judge his credibility for yourself in the interview; but at least to me, this is not a guy who should be testifying in his own defense. If anyone has the trial transcripts / motions / etc. that deal with this, then I'd love to see.

Also: Microsoft seems to claim that the original license disappears when the original media (CD, or restore partition) are lost. I don't know enough about the applicable law, and I haven't read the license, so I don't know if this is true. If this is true, then anyone using his CD (or anyone downloading the image straight from Microsoft, for that matter) is breaking the license. There is no technical measure to enforce this, though. I presume this is the basis for Microsoft's claim that the CD was worth $25.

Those seem like ideas on how to get past customs more easily, not necessarily an admission of any wrongdoing.

>Microsoft Windows is not Free Software.

Sorry, but allowing the Free Software movement to insist they are the sole proprietors of the definition of "free" is wrong. About as wrong as the people who are trying to co-opt the word "racism".

If something can be had for $0, it is free. Even with a capital F. That there exists other definition of free does not prevent people from legitimately using this definition.

It's not windows that's 'free', it's the recovery disk, which Microsoft allows anyone to download and burn for free.

> Referring to Microsoft Windows as "free software" is just wrong. Microsoft Windows is not Free Software.

Free has many meanings. Look up the dictionary [1]. In the context of the situation / article, it is free. As in $0. As in costs nothing. Context matters, and the FSF / open source context does not apply here.

This ridiculous insistence on the "one true pure" meaning and rigid interpretation of words is a like cancer of stupid infecting humanity.

[1]: http://www.dictionary.com/browse/free

You misunderstand. He was convicted of copyright infringement for selling unlicensed copies of Windows. He didn't do this, as copies of Windows aren't sold; they're licensed. As the article states, he didn't sell licenses. He sold recovery media which is available for free from the Microsoft website, and from OEM suppliers.

He did admit to trademark infringement by reusing the protected Dell artwork on the disks, but he wasn't convicted of that. If he was, it would have been a slap on the wrist and a fine. This was unjust and totally unreasonable.

The guy is guilty for that, the problem is the way damages were calculated and that they guy ended in prison instead of paying the damages.

My understanding was that he was changing $.75 (essentially the cost of the DVDs)?

Counterfeit handbags damage the brand either by being made of poor quality materials, or by just being sold cheaply, which undercuts the brand's ability to charge a premium. (Not making a value judgment of these practices; just it is what it is.)

Neither of those things is the case here. The discs are near-identical in quality to the discs Dell would have furnished, and (as far as I can tell), Dell essentially gives the discs away for free, only charging more or less for the effort needed to manufacture and ship them. Either way, Dell is certainly not profiting in any meaningful way from these discs, and getting a disc from someone else certainly wouldn't harm Dell's brand. They provide this service as a convenience to the customer, and likely it's actually a cost center.

Should he have used Dell's labeling and packaging? No, of course not. That was incredibly stupid. I don't think he did it with any nefarious reason to deceive; likely he just figured that a technically-unsophisticated customer would trust the discs more with the brand name matching the computer (even though a hypothetical disc with his own logo and packaging would be just as safe). A poor decision legally-speaking, definitely, but I don't see how throwing him in jail could ever be anything but an extreme overreaction to the facts at hand.

>A copyright holder, and he/she alone, has the right to make copies or authorize others to make copies of a work.

In this case, Microsoft provided that authorisation to its license holders by making available a web tool where they could create their own installation media for the software they were licensed to use.

So the software was indeed "free" for licensed users - the very same people who were receiving the disks - in the sense they were not required to pay for it. It might be a license violation to download and burn the disks on their behalf, but that's a civil matter.

The crucial element for proving criminal copyright infringement was a personal gain figure that was manufactured by the Microsoft expert witness.

They only don't because Microsoft wanted to double-dip. They want one license fee when the computer is originally sold, and then a second ($25) every time it is resold.

The problem with that is that Microsoft cannot have it both ways, either the license is tied to the physical hardware (in which case recyclers don't need to pay $25) or it isn't (in which case people should be able to resell them on eBay).

The article addresses this:

Of course, if you don’t have a DVD burner (remember, this was a while back — these days you’d use a USB drive), you’d have to get one from a friend who has one, a licensed refurbisher, or your manufacturer (for instance, Dell or Lenovo) for a fee.

The guy is not innocent because he used those logos/brands but there was some weird issues in this case,like emails getting lost by the government, then finding them after 2 years but some of them did not match, also the CDs very evaluated to 25$ a piece which is weird since there was no license included. Microsoft did not lose any money in this particular case but for some reason they wanted to make an example .

You don't understand. Without the (license) key (which he didn't sell), these disks are coasters. Windows installations without a valid license key (or a crack, which he again didn't provide) are crippled after 30 days.

These disks are only useful to people who already own a Windows license.

He never sold any licenses, he sold the medium and the convenience of having the installation software easily available for his customers.

The OEM license attached to the hardware is still necessary to use the medium (which AFAIK is tied to the hardware, not the user), so I do not personally see any monetary loss for Microsoft. The only way Microsoft (or Dell, etc) lost money is because they charge an absurd price of money for something that is basically a DVD coaster without any license. They only have themselves to blame.

> 15 months sounds excessive, but the fact the software could be downloaded by customers for free is not a mitigating factor in a guy attempting to make a profit making it look as much as possible like a paid for product sold by Dell/Microsoft...

I don't know if I would call it 'trying to make profit' when you make CDs in China, ship them to US and sell the CDs for 25 cent a piece.

According to himself he made no money off of this both because no one wanted to buy the CDs and the price didn't really allow for profit.

There are some quotes from his emails here which show he was clearly trying to profit and counterfeit the CDs to make them look exactly like the originals.

https://blogs.microsoft.com/on-the-issues/2018/04/27/the-fac...

According to what he says himself in an interview he was selling the CDs 25 cent a piece after paying for production in China and shipping to the US. I don't think you can get much meaningful profit from that.

He cloned a disk, bit by bit, also the cover /label on the disk was cloned. The disks were not cracked so the user had to input the serial number from the bottom of the laptop

Basically he was making counterfeit restore and Windows installation CDs, which you can just download for free, and distributing them with refurbished PCs he was selling. M$ claimed damages of $25 per CD based on the $25 they charge for their refurbishing program which provides a copy of the install media but also included a new license and participation the M$'s authorized refurbishing program even though no licenses were illegally provided. So now this guy is going to federal prison over what's really a copyright violation.

That definitely paints a different picture of the situation.

> Evidence submitted to the court shows that one transaction alone generated $28,000 in revenue for Mr. Lundgren and his co-defendant from the sale of 8,000 counterfeit software discs.

That's quite a bit more than 25 cents per disc.

Should Microsoft charge $25 for a disc and license to run windows on a refurbished, maybe not. But, I have a hard time believing that anyone could attempt to build a legitimate business based like the one described in this case and not expect some kind of legal repercussions.

> Sentencing guidelines for Mr. Lundgren were calculated at 37 to 46 months, according to federal sentencing rules, and the judge in this case issued a below-guidelines sentence of 15 months

I'm not sure how I feel about the prison sentence. I understand that to many people this feels like punishing someone that was trying to make the world a better place, but I can also see how this falls under the piracy / copyright infringement umbrella.

> Mr. Lundgren was even warned by a customs seizure notice that his conduct was illegal and given the opportunity to stop before he was prosecuted.

If this is true I have a hard time feeling bad for the guy. He should have consulted a lawyer at that point. At the least he was aware of the possible consequences.

Not sure why this is getting buried.

The correspondence is pretty damning.

Ahh yes MS Defending themselves with "We love Recyclers along as they give us $25 for every computer they recycle... if not we will put you in prison"

Not much of a defense if you ask me