11 ms·

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

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-facts-about-a-recent-counterfeiting-case-brought-by-the-u-s-government/ 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.

Hnrobert42 8y ago
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/5/2018/04/2LUNDGREN6.pdf https://blogs.microsoft.com/uploads/prod/sites/5/2018/04/2LU...
- djsumdog 8y ago
  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.
- zeusk 8y ago
  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).
  - sp332 8y ago
    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.
    - zeusk 8y ago
      > 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 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.
      - justrobert 8y ago
        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.
        zeusk 8y ago
        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).
        justrobert 8y ago
        The image gallery doesn't tell us if they were using a dell recovery cd or something else.
        deleted 8y ago
        [deleted]
cm2187 8y ago
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.
- zeusk 8y ago
  > 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.
  - jaycroft 8y ago
    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.
    - zeusk 8y ago
      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 https://www.microsoft.com/en-us/software-download/windows7 Windows 10: https://www.microsoft.com/en-us/software-download/windows10ISO 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.
      - icebraining 8y ago
        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.
syshum 8y ago
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.
- DanBC 8y ago
  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.
  - syshum 8y ago
    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
    - aje403 8y ago
      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
      - syshum 8y ago
        Prison should be reserved only for those that are a Physical Danger to others, not to punish people that may harm Corporate profits
gcb0 8y ago
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.
jaycroft 8y ago
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.
- jaycroft 8y ago
  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-lundgren-loses-appeal-must.html https://www.techspot.com/news/74324-e-waste-recycler-eric-lu... [2]https://arstechnica.com/tech-policy/2018/04/why-the-man-who-tried-to-sell-windows-recovery-discs-will-go-to-prison/ https://arstechnica.com/tech-policy/2018/04/why-the-man-who-...
  - deleted 8y ago
    [deleted]
- Hamuko 8y ago
  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."
rayiner 8y ago
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.)
- s2g 8y ago
  > 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?
  - scoggs 8y ago
    I think that's an argument about first party versus third party fraud.
- swang 8y ago
  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_tonya_hardings_prosecuto.html http://www.oregonlive.com/portland/index.ssf/2018/02/i_was_t... http://www.oregonlive.com/trending/2018/01/i_nauseated_the_oregonians_for.html http://www.oregonlive.com/trending/2018/01/i_nauseated_the_o... http://www.oregonlive.com/trending/2018/01/thanks_to_i_tonya_tonya_hardin.html 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.
webbles 8y ago
Fuck microsoft, I dont give a fuck about their perspective nor logic. So they and you can fuck right off.
needToSay 8y ago
He was disrupting the ancient and ineffective market you dumb nigger monkey
devindotcom 8y ago
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-imprison-a-man-for-counterfeiting-software-it-gives-away-for-free/ 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.
- textmode 8y ago
  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?

Hnrobert42 8y ago

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/5/2018/04/2LUNDGREN6.pdf https://blogs.microsoft.com/uploads/prod/sites/5/2018/04/2LU...

djsumdog 8y ago
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.
zeusk 8y ago
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).
- sp332 8y ago
  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.
  - zeusk 8y ago
    > 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 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.
    - justrobert 8y ago
      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.
      - zeusk 8y ago
        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).
        justrobert 8y ago
        The image gallery doesn't tell us if they were using a dell recovery cd or something else.
      - deleted 8y ago
        [deleted]

cm2187 8y ago

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.

zeusk 8y ago
> 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.
- jaycroft 8y ago
  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.
  - zeusk 8y ago
    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 https://www.microsoft.com/en-us/software-download/windows7 Windows 10: https://www.microsoft.com/en-us/software-download/windows10ISO 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.
    - icebraining 8y ago
      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.

syshum 8y ago

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.

DanBC 8y ago
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.
- syshum 8y ago
  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
  - aje403 8y ago
    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
    - syshum 8y ago
      Prison should be reserved only for those that are a Physical Danger to others, not to punish people that may harm Corporate profits

gcb0 8y ago

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.

jaycroft 8y ago

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.

jaycroft 8y ago
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-lundgren-loses-appeal-must.html https://www.techspot.com/news/74324-e-waste-recycler-eric-lu... [2]https://arstechnica.com/tech-policy/2018/04/why-the-man-who-tried-to-sell-windows-recovery-discs-will-go-to-prison/ https://arstechnica.com/tech-policy/2018/04/why-the-man-who-...
- deleted 8y ago
  [deleted]
Hamuko 8y ago
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."

rayiner 8y ago

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.)

s2g 8y ago
> 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?
- scoggs 8y ago
  I think that's an argument about first party versus third party fraud.
swang 8y ago
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_tonya_hardings_prosecuto.html http://www.oregonlive.com/portland/index.ssf/2018/02/i_was_t... http://www.oregonlive.com/trending/2018/01/i_nauseated_the_oregonians_for.html http://www.oregonlive.com/trending/2018/01/i_nauseated_the_o... http://www.oregonlive.com/trending/2018/01/thanks_to_i_tonya_tonya_hardin.html 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.

webbles 8y ago

Fuck microsoft, I dont give a fuck about their perspective nor logic. So they and you can fuck right off.

needToSay 8y ago

He was disrupting the ancient and ineffective market you dumb nigger monkey

devindotcom 8y ago

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-imprison-a-man-for-counterfeiting-software-it-gives-away-for-free/ 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.

textmode 8y ago
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?