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Microsoft helped imprison a man for ‘counterfeiting’ software it gives away free

145 points by iamjeff 8y ago

Hamuko 8y ago
If Lundgren was counterfeiting software that you could "download for free", then why did he and Bob Wolff go around buying genuine Dell recovery discs in order to produce their own copies?
- tossaway1 8y ago
  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.
  - Hamuko 8y ago
    That is not in any way related to this. Why did Lundgren buy a genuine Dell recovery disc if the software was available for free online? There would be no need to buy a genuine Dell recovery disc to serve as the master disc for his cloned discs. Of course, I do know the answer as I am not naïve: the Dell recovery disc is not the same as the Microsoft.com ISO download you can procure. The Dell disc contains an installation of Windows + some Dell extra content that you would expect to have in a Dell disc. And if he was to download the ISO from Microsoft and burn it onto a DVD, it would produce a checksum that wouldn't be identical to the Dell recovery disc, revealing it as a counterfeit.
skate22 8y ago
Title is missleading: "His actual crime, which he pleaded guilty to, was counterfeiting the packaging to make the discs pass for Dell-branded ones." He misled his customers in order to make money. This isnt really different than selling knock off gucci handbags. Sure they probably work & look the same, but it does damage to the legitimate brand.
- ilogik 8y ago
  My understanding was that he was changing $.75 (essentially the cost of the DVDs)?
  - simion314 8y ago
    0.25 I think and MS convinced the judge that the value MS lost was 25$/disk because the judge missed the point that the guy was not selling any license.
  - kgwgk 8y ago
    According to his own appeal, he was selling them for $4 (he argued that was the right price, instead of $25, that should be used to calculate the infringement amount).
- kelnos 8y ago
  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.
  - skate22 8y ago
    Imagine the following scenario: One of his discs is corrupted and causes serious issues for the customer. That customer is so put off from the experience that they vow to never buy dell again. For dell to take that risk is fair. For this individual to take that risk for dell is not fair. Dell also likely does more QA on what they ship than the one individual. Also, people trust in the brand name in part because of what the brand name has at stake to lose. Lying to the technically unsophosticated as you put it should be no small offense.
notahacker 8y ago
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...
- simion314 8y ago
  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 .
- Karlozkiller 8y ago
  > 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.
  - icebraining 8y ago
    In the emails, he writes "This will ensure a steady income for the next year to come!"
    - Karlozkiller 8y ago
      He disputes the emails claiming they are made up and tampered with insinuating his partner in selling these CDs has implicated him to get a lesser sentence. Obviously someone in this whole mess is lying or grossly misinformed, the problem is figuring out who. He said he had IT-experts testify in court that the emails had been tampered with, I assume one could look into that in some kind of public record over the case?
scandox 8y ago
Did he or did he not seek to make a meaningful profit from this activity? I can't see information on that in the article. Also did he use the downloadable file or did he actually burn from an existing DELL disc? I think there would be software differences potentially there right? I got a reinstallation media sent out from DELL and it definitely seemed customised.
- simion314 8y ago
  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
- microwavecamera 8y ago
  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.
- Karlozkiller 8y ago
  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.
  - criddell 8y ago
    It's been reported that he earned $28,000 from the transaction.
    - Karlozkiller 8y ago
      Yes, he claims that was all the money he ever got from his 'accomplice' for selling a lot of things over several years, including screws and the CDs in question. The CDs according to him were only a minor part of that sum. Doesn't mean it's necessarily true, for obvious reasons. And one can only hope the court looked through all that as thoroughly as possible.
mchannon 8y ago
So many in this case are missing the point. If Microsoft caught him violating their copyright, and it bothered Microsoft, Microsoft should have sued in civil court. That is the purpose of civil court- to penalize wrongdoing by companies. Happens all the time. But Microsoft was never going to recover anything in civil court. 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. This is called a civil-criminal hybrid case. It should be civilly prosecuted, but the US government gets in cahoots with a corporation and the pair conspire to make it a criminal prosecution, which allows the corporation to de facto imprison any person it helps to convict. Microsoft was able to avoid the lion's share of the legal fees, and won't be responsible for any fees when and if the case is successfully appealed. You will, as a taxpayer, footing the DOJ's bill. Any restitution Mr. Lundgren pays will be far higher a return than Microsoft could have gained in a civil case. As for the investigating body within the government, it gets enriched through forfeiture. Everybody wins, except the small guy and the taxpayer. Mr. Lundgren might have been in a stronger position if he had not pled guilty to two of the counts. Whether to sign away your integrity for a potentially lighter sentence is a decision no one should have to make.
- Voloskaya 8y ago
  > 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-facts-about-a-recent-counterfeiting-case-brought-by-the-u-s-government/ https://blogs.microsoft.com/on-the-issues/2018/04/27/the-fac...
  - mchannon 8y ago
    Source that Microsoft lied? Gov Exhibit 17. There are probably many more. There are about three or four lies on there, which anybody familiar with the computer recycling business can confirm. Microsoft had no potential sales of genuine operating systems through this conduct because any license these discs would have been useful for was affixed to the computer and not included with the counterfeit discs. Hence, the loss and restitution amount were falsely stated. As to the fanciful notion that Microsoft was somehow called in at the 11th hour, with zero involvement in the case prior to that moment, one would only need to talk to any attorney versed in criminal law to disabuse themselves of it. Prosecutors don't bring cases they aren't relatively certain they can win- that's why they have a 93+% win rate. That means contacting the "victim" from the get-go to make sure they're willing to cooperate and testify.
nailer 8y ago
The other side of the case, which contains a lot of detail not mentioned 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...
- larntz 8y ago
  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.
  - Karlozkiller 8y ago
    According to 'the defendant' that value is all of the money he got from Bob Wolff over a couple of Years not only from the discs. The discs returned a lot less. Though of course that might be a lie, I wouldn't know.
    - tripletao 8y ago
      The purchase order says $28k for 8k disks. It would be funny if he's telling the truth, and the fake PO that he made for an unrelated reason came back to bite him here...
lolc 8y ago
The title on the original is "How Microsoft helped imprison a man for ‘counterfeiting’ software it gives away for free". Even that title is misleading, but the shortened title here is wrong because "Free Software" has a specific meaning. Referring to Microsoft Windows as "free software" is just wrong. Microsoft Windows is not Free Software. Even if you leave out the caps intending to refer to price only, the title is wrong. Windows is not for free. You can only get unlicensed copies for free. Which is what the article is about.
- petee 8y ago
  It's not windows that's 'free', it's the recovery disk, which Microsoft allows anyone to download and burn for free.
  - tialaramex 8y ago
    That's only for personal use. Microsoft literally sells the exact product this was pretending to be for $25 ($20 for the crappy Home version, which they told the court was the appropriate comparison, the court disagreed and picked $25). My local supermarket sometimes has little pieces of cheese on cocktail sticks to sample. Those are free too. If you eat six, and then run out of the supermarket, you're a dick, but they won't try to prosecute you for theft. But if you say "Aha, cheese is free", reach over the counter and steal a whole wheel, expect to get prosecuted and don't expect a magistrate to buy your story about how clearly since individual pieces of cheese were given away therefore "cheese is free".
    - lolc 8y ago
      Maybe I'm mistaken but I thought the $25 copies of Windows sold by Microsoft included a licence? Also equating unlicenced copies to theft of physical goods rarely helps to understand the case.
      - Someone1234 8y ago
        The $25 includes a new license. Microsoft claims that the original OEM license is invalidated by recycling and that they should be paid twice (and claim their $25 discount licenses are a benevolent gift).
deleted 8y ago
[deleted]
tripletao 8y ago
His punishment seems disproportionate and stupid (like, why are we spending money to lock him up instead of fining him more?); but he clearly intended to make disks that buyers would think were factory originals, and knew that he was breaking the law. From his email: > I can look in to the missing boxes - Usually in my history - Customs just ships them to you 3 weeks later. > If they call you - play stupid and just tell them that you ordered from an asset management overseas. > Tell him that the product was guaranteed to be real and that you paid a very high price for it. Act upset as to why you had not received your product yet. Obviously cherry-picked by the prosecutors; but there's a lot more, and it makes him look much worse than the press coverage does. https://blogs.microsoft.com/uploads/prod/sites/5/2018/04/2LUNDGREN6.pdf https://blogs.microsoft.com/uploads/prod/sites/5/2018/04/2LU... ETA: And why do the media keep repeating the $0.25/disk? There's a PO where he sold some for $3 or $4 each. Less than the stupid $25, but not charity.
- okasaki 8y ago
  Those seem like ideas on how to get past customs more easily, not necessarily an admission of any wrongdoing.
  - DEFCON28 8y ago
    Huh? Lying to customs isn’t “wrongdoing”? You need to get a new moral compass.
    - tripletao 8y ago
      In fairness, it's incredibly common--I once ordered from a Chinese site where the order form had a field for the value that you wanted them to declare. You won't usually get caught, but the government isn't usually too happy if you do.
  - MichaelGG 8y ago
    The rest of his emails are about pushing sales, saying he'll fix issues to make it more legit looking, but encouraging his sales guy to move the product.
ommunist 8y ago
Can he sue MS back to recover value of 15 months of his life in a civil case?
DEFCON28 8y ago
Microsoft didn’t imprison anyone. The U.S. government did.
roel_v 8y ago
Look, I'm not saying that this is right or not, but this article does a horrible job of arguing its point, and it's completely lacking any understanding of the law. "Furthermore: People weren’t buying software, let alone “counterfeit software.” The discs in question are at best “unauthorized” copies of software provided for free by Microsoft, not really a term that carries a lot of legal or even rhetorical weight." I can even... just... What does that even mean? What does 'buying the software' mean vs 'buying the licence'? This author clearly has no idea about copyright law at all, and has constructed a complete alternative narrative in his head, which he is then using to attack a straw man. A 'licence' is a contract between two parties, in which one party (usually) agrees to pay a certain amount of money (the 'licence fee') and where the other party then lets the one paying the fee make a copy of some work to use it. A copyright holder, and he/she alone, has the right to make copies or authorize others to make copies of a work. So 'unauthorized copies' are the very definition of copyright infringement. What does the author mean 'not really a term that carries a lot of legal weight'? This whole artificial 'Microsoft makes it available for free online and you're not really buying that, you're buying the licence' is complete jibber jabber - sure you can download it, but the terms put very clear restrictions on who can download it, why and what can be done with it after. And yes there's all sorts of confounding factors - how much did the guy charge, and this is a criminal case and not a civil one, and there is the Dell branding thing, and there is intent, on and on. But my point is: this author shouldn't write about things he clearly has absolutely no clue about.
- cornholio 8y ago
  >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.
PerilousD 8y ago
I stopped buying windows and the MS Office suite years ago when Microsoft clearly stopped caring about its consumer base. As for this case, its unfair to Lundgren - should have had better lawyers - Microsoft is simply taking advantage of the best legal system money can buy to keep its shareholders happy
petraeus 8y ago
Its free for YOU to use, its not free to copy them impersonate MS and profit off them en masse
petraeus 8y ago
Its like this, linux is FREE, but if you start impersonating red hat to push linux you'll be in trouble
jmull 8y ago
This article is quite disingenuous. The lie is in the first sentence: "...15 months in prison for selling discs that let people reinstall Windows on licensed machines. (emphasis mine) The prosecution successfully argued the machines these discs were meant to be sold with did not have valid Windows licenses (and that these discs were part of an effort to avoid purchasing them). You will want to find another article on this case to read about it since this dances fast to avoid addressing it. We have a crime, a guilty plea, and sentencing. And a careful review in the appeal. Hard to see what's wrong here.
- Someone1234 8y ago
  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).
  - jmull 8y ago
    I don’t think software licenses are necessarily restricted to common notions of ownership, as you suggest. Whether that’s right and good is another question entirely. Personally, I’d like to see strong consumer protection laws so that software license couldn’t violate common notions of ownership in cases where negotiation of terms isn’t possible, but that’s an idea for a better future, not really relevant to this case.
    - Someone1234 8y ago
      > I don’t think software licenses are necessarily restricted to common notions of ownership, as you suggest. They are in the EU. The US takes a much more pro-business stance.
  - WorldMaker 8y ago
    Microsoft guidelines appear to state that given the Ship of Theseus nature of machines there is a two-factor of sorts authentication for the license of that machine: the license code sticker, and the original recovery disc (as a harder to counterfeit physical token than the exact state of hardware of a machine; remember all the XP era relicensing woes when you swapped out a RAM chip?). If you sell all three together on eBay, that's entirely fine, and it doesn't need a relicense fee. It's when you start to lose one of those three that Microsoft asks you pay a relicensing fee.
notahacker 8y ago
Just spotted this has been discussed before on HN, complete with comments from the Techcrunch author https://news.ycombinator.com/item?id=16946478&goto=news https://news.ycombinator.com/item?id=16946478&goto=news

145 points by iamjeff 8y ago

If Lundgren was counterfeiting software that you could "download for free", then why did he and Bob Wolff go around buying genuine Dell recovery discs in order to produce their own copies?

tossaway1 8y ago
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.
- Hamuko 8y ago
  That is not in any way related to this. Why did Lundgren buy a genuine Dell recovery disc if the software was available for free online? There would be no need to buy a genuine Dell recovery disc to serve as the master disc for his cloned discs. Of course, I do know the answer as I am not naïve: the Dell recovery disc is not the same as the Microsoft.com ISO download you can procure. The Dell disc contains an installation of Windows + some Dell extra content that you would expect to have in a Dell disc. And if he was to download the ISO from Microsoft and burn it onto a DVD, it would produce a checksum that wouldn't be identical to the Dell recovery disc, revealing it as a counterfeit.

skate22 8y ago

Title is missleading: "His actual crime, which he pleaded guilty to, was counterfeiting the packaging to make the discs pass for Dell-branded ones." He misled his customers in order to make money. This isnt really different than selling knock off gucci handbags. Sure they probably work & look the same, but it does damage to the legitimate brand.

ilogik 8y ago
My understanding was that he was changing $.75 (essentially the cost of the DVDs)?
- simion314 8y ago
  0.25 I think and MS convinced the judge that the value MS lost was 25$/disk because the judge missed the point that the guy was not selling any license.
- kgwgk 8y ago
  According to his own appeal, he was selling them for $4 (he argued that was the right price, instead of $25, that should be used to calculate the infringement amount).
kelnos 8y ago
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.
- skate22 8y ago
  Imagine the following scenario: One of his discs is corrupted and causes serious issues for the customer. That customer is so put off from the experience that they vow to never buy dell again. For dell to take that risk is fair. For this individual to take that risk for dell is not fair. Dell also likely does more QA on what they ship than the one individual. Also, people trust in the brand name in part because of what the brand name has at stake to lose. Lying to the technically unsophosticated as you put it should be no small offense.

notahacker 8y ago

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...

simion314 8y ago
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 .
Karlozkiller 8y ago
> 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.
- icebraining 8y ago
  In the emails, he writes "This will ensure a steady income for the next year to come!"
  - Karlozkiller 8y ago
    He disputes the emails claiming they are made up and tampered with insinuating his partner in selling these CDs has implicated him to get a lesser sentence. Obviously someone in this whole mess is lying or grossly misinformed, the problem is figuring out who. He said he had IT-experts testify in court that the emails had been tampered with, I assume one could look into that in some kind of public record over the case?

scandox 8y ago

Did he or did he not seek to make a meaningful profit from this activity? I can't see information on that in the article. Also did he use the downloadable file or did he actually burn from an existing DELL disc? I think there would be software differences potentially there right? I got a reinstallation media sent out from DELL and it definitely seemed customised.

simion314 8y ago
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
microwavecamera 8y ago
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.
Karlozkiller 8y ago
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.
- criddell 8y ago
  It's been reported that he earned $28,000 from the transaction.
  - Karlozkiller 8y ago
    Yes, he claims that was all the money he ever got from his 'accomplice' for selling a lot of things over several years, including screws and the CDs in question. The CDs according to him were only a minor part of that sum. Doesn't mean it's necessarily true, for obvious reasons. And one can only hope the court looked through all that as thoroughly as possible.

mchannon 8y ago

So many in this case are missing the point. If Microsoft caught him violating their copyright, and it bothered Microsoft, Microsoft should have sued in civil court. That is the purpose of civil court- to penalize wrongdoing by companies. Happens all the time. But Microsoft was never going to recover anything in civil court. 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. This is called a civil-criminal hybrid case. It should be civilly prosecuted, but the US government gets in cahoots with a corporation and the pair conspire to make it a criminal prosecution, which allows the corporation to de facto imprison any person it helps to convict. Microsoft was able to avoid the lion's share of the legal fees, and won't be responsible for any fees when and if the case is successfully appealed. You will, as a taxpayer, footing the DOJ's bill. Any restitution Mr. Lundgren pays will be far higher a return than Microsoft could have gained in a civil case. As for the investigating body within the government, it gets enriched through forfeiture. Everybody wins, except the small guy and the taxpayer. Mr. Lundgren might have been in a stronger position if he had not pled guilty to two of the counts. Whether to sign away your integrity for a potentially lighter sentence is a decision no one should have to make.

Voloskaya 8y ago
> 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-facts-about-a-recent-counterfeiting-case-brought-by-the-u-s-government/ https://blogs.microsoft.com/on-the-issues/2018/04/27/the-fac...
- mchannon 8y ago
  Source that Microsoft lied? Gov Exhibit 17. There are probably many more. There are about three or four lies on there, which anybody familiar with the computer recycling business can confirm. Microsoft had no potential sales of genuine operating systems through this conduct because any license these discs would have been useful for was affixed to the computer and not included with the counterfeit discs. Hence, the loss and restitution amount were falsely stated. As to the fanciful notion that Microsoft was somehow called in at the 11th hour, with zero involvement in the case prior to that moment, one would only need to talk to any attorney versed in criminal law to disabuse themselves of it. Prosecutors don't bring cases they aren't relatively certain they can win- that's why they have a 93+% win rate. That means contacting the "victim" from the get-go to make sure they're willing to cooperate and testify.

nailer 8y ago

The other side of the case, which contains a lot of detail not mentioned 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...

larntz 8y ago
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.
- Karlozkiller 8y ago
  According to 'the defendant' that value is all of the money he got from Bob Wolff over a couple of Years not only from the discs. The discs returned a lot less. Though of course that might be a lie, I wouldn't know.
  - tripletao 8y ago
    The purchase order says $28k for 8k disks. It would be funny if he's telling the truth, and the fake PO that he made for an unrelated reason came back to bite him here...

lolc 8y ago

The title on the original is "How Microsoft helped imprison a man for ‘counterfeiting’ software it gives away for free". Even that title is misleading, but the shortened title here is wrong because "Free Software" has a specific meaning. Referring to Microsoft Windows as "free software" is just wrong. Microsoft Windows is not Free Software. Even if you leave out the caps intending to refer to price only, the title is wrong. Windows is not for free. You can only get unlicensed copies for free. Which is what the article is about.

petee 8y ago
It's not windows that's 'free', it's the recovery disk, which Microsoft allows anyone to download and burn for free.
- tialaramex 8y ago
  That's only for personal use. Microsoft literally sells the exact product this was pretending to be for $25 ($20 for the crappy Home version, which they told the court was the appropriate comparison, the court disagreed and picked $25). My local supermarket sometimes has little pieces of cheese on cocktail sticks to sample. Those are free too. If you eat six, and then run out of the supermarket, you're a dick, but they won't try to prosecute you for theft. But if you say "Aha, cheese is free", reach over the counter and steal a whole wheel, expect to get prosecuted and don't expect a magistrate to buy your story about how clearly since individual pieces of cheese were given away therefore "cheese is free".
  - lolc 8y ago
    Maybe I'm mistaken but I thought the $25 copies of Windows sold by Microsoft included a licence? Also equating unlicenced copies to theft of physical goods rarely helps to understand the case.
    - Someone1234 8y ago
      The $25 includes a new license. Microsoft claims that the original OEM license is invalidated by recycling and that they should be paid twice (and claim their $25 discount licenses are a benevolent gift).

deleted 8y ago

[deleted]

tripletao 8y ago

His punishment seems disproportionate and stupid (like, why are we spending money to lock him up instead of fining him more?); but he clearly intended to make disks that buyers would think were factory originals, and knew that he was breaking the law. From his email: > I can look in to the missing boxes - Usually in my history - Customs just ships them to you 3 weeks later. > If they call you - play stupid and just tell them that you ordered from an asset management overseas. > Tell him that the product was guaranteed to be real and that you paid a very high price for it. Act upset as to why you had not received your product yet. Obviously cherry-picked by the prosecutors; but there's a lot more, and it makes him look much worse than the press coverage does. https://blogs.microsoft.com/uploads/prod/sites/5/2018/04/2LUNDGREN6.pdf https://blogs.microsoft.com/uploads/prod/sites/5/2018/04/2LU... ETA: And why do the media keep repeating the $0.25/disk? There's a PO where he sold some for $3 or $4 each. Less than the stupid $25, but not charity.

okasaki 8y ago
Those seem like ideas on how to get past customs more easily, not necessarily an admission of any wrongdoing.
- DEFCON28 8y ago
  Huh? Lying to customs isn’t “wrongdoing”? You need to get a new moral compass.
  - tripletao 8y ago
    In fairness, it's incredibly common--I once ordered from a Chinese site where the order form had a field for the value that you wanted them to declare. You won't usually get caught, but the government isn't usually too happy if you do.
- MichaelGG 8y ago
  The rest of his emails are about pushing sales, saying he'll fix issues to make it more legit looking, but encouraging his sales guy to move the product.

ommunist 8y ago

Can he sue MS back to recover value of 15 months of his life in a civil case?

DEFCON28 8y ago

Microsoft didn’t imprison anyone. The U.S. government did.

roel_v 8y ago

Look, I'm not saying that this is right or not, but this article does a horrible job of arguing its point, and it's completely lacking any understanding of the law. "Furthermore: People weren’t buying software, let alone “counterfeit software.” The discs in question are at best “unauthorized” copies of software provided for free by Microsoft, not really a term that carries a lot of legal or even rhetorical weight." I can even... just... What does that even mean? What does 'buying the software' mean vs 'buying the licence'? This author clearly has no idea about copyright law at all, and has constructed a complete alternative narrative in his head, which he is then using to attack a straw man. A 'licence' is a contract between two parties, in which one party (usually) agrees to pay a certain amount of money (the 'licence fee') and where the other party then lets the one paying the fee make a copy of some work to use it. A copyright holder, and he/she alone, has the right to make copies or authorize others to make copies of a work. So 'unauthorized copies' are the very definition of copyright infringement. What does the author mean 'not really a term that carries a lot of legal weight'? This whole artificial 'Microsoft makes it available for free online and you're not really buying that, you're buying the licence' is complete jibber jabber - sure you can download it, but the terms put very clear restrictions on who can download it, why and what can be done with it after. And yes there's all sorts of confounding factors - how much did the guy charge, and this is a criminal case and not a civil one, and there is the Dell branding thing, and there is intent, on and on. But my point is: this author shouldn't write about things he clearly has absolutely no clue about.

cornholio 8y ago
>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.

PerilousD 8y ago

I stopped buying windows and the MS Office suite years ago when Microsoft clearly stopped caring about its consumer base. As for this case, its unfair to Lundgren - should have had better lawyers - Microsoft is simply taking advantage of the best legal system money can buy to keep its shareholders happy

petraeus 8y ago

Its free for YOU to use, its not free to copy them impersonate MS and profit off them en masse

petraeus 8y ago

Its like this, linux is FREE, but if you start impersonating red hat to push linux you'll be in trouble

jmull 8y ago

This article is quite disingenuous. The lie is in the first sentence: "...15 months in prison for selling discs that let people reinstall Windows on licensed machines. (emphasis mine) The prosecution successfully argued the machines these discs were meant to be sold with did not have valid Windows licenses (and that these discs were part of an effort to avoid purchasing them). You will want to find another article on this case to read about it since this dances fast to avoid addressing it. We have a crime, a guilty plea, and sentencing. And a careful review in the appeal. Hard to see what's wrong here.

Someone1234 8y ago
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).
- jmull 8y ago
  I don’t think software licenses are necessarily restricted to common notions of ownership, as you suggest. Whether that’s right and good is another question entirely. Personally, I’d like to see strong consumer protection laws so that software license couldn’t violate common notions of ownership in cases where negotiation of terms isn’t possible, but that’s an idea for a better future, not really relevant to this case.
  - Someone1234 8y ago
    > I don’t think software licenses are necessarily restricted to common notions of ownership, as you suggest. They are in the EU. The US takes a much more pro-business stance.
- WorldMaker 8y ago
  Microsoft guidelines appear to state that given the Ship of Theseus nature of machines there is a two-factor of sorts authentication for the license of that machine: the license code sticker, and the original recovery disc (as a harder to counterfeit physical token than the exact state of hardware of a machine; remember all the XP era relicensing woes when you swapped out a RAM chip?). If you sell all three together on eBay, that's entirely fine, and it doesn't need a relicense fee. It's when you start to lose one of those three that Microsoft asks you pay a relicensing fee.

notahacker 8y ago

Just spotted this has been discussed before on HN, complete with comments from the Techcrunch author https://news.ycombinator.com/item?id=16946478&goto=news https://news.ycombinator.com/item?id=16946478&goto=news