10 ms·

Microsoft case results in prison time for restore CD copier [video]

36 points by kristoff_it 8y ago

manov 8y ago
[Video]??
agumonkey 8y ago
That's insane
kartan 8y ago
I agree with the point that having technology illiterate judges allows for abuse from technology companies. The fight of tech corporations against reuse of hardware it is ecologically sustainable. And finally, tech companies are negating the ownership of our own hardware. The software is licensed, hardware only works with certain software, so you don't own anymore what you buy. And laws are obsolete when it comes to this fact.
- antoineMoPa 8y ago
  You mean unsustainable?
  - kartan 8y ago
    Yes. Thank you for the correction.
jesseryoung 8y ago
Microsoft higher ups should've stepped in earlier on this one. This is clearly a case of a guy trying to do right and help out customers and not understanding how the law treats software and how that's different than hardware. They could've easily cut him a deal where he could hand out genuine Windows licenses with the sale of these devices. It is legal (mostly) for you to pick up a piece of hardware that somebody threw away and do anything you want with it. You can legally use it yourself, sell it or just give it away. In the eyes of the law, software doesn't work that way. Could you pick up a software license key that somebody threw away and re-use it? Depending on the license the original person purchased, likely not. It sucks, I don't agree with it but it's how it is.
- DanBC 8y ago
  Have you read the emails that this man was sending? He was deliberately trying to fool his customers (who were asking for genuine MS discs, not some copy he'd made) and he was deliberately trying to evade customs. https://blogs.microsoft.com/uploads/prod/sites/5/2018/04/2LUNDGREN6.pdf https://blogs.microsoft.com/uploads/prod/sites/5/2018/04/2LU... https://blogs.microsoft.com/uploads/prod/sites/5/2018/04/FINAL-FILED-BRIEF-11.17.17-004.pdf https://blogs.microsoft.com/uploads/prod/sites/5/2018/04/FIN...
  - jesseryoung 8y ago
    No I had not... Yeah, this guy was totally attempting to make a profit off of piracy.
ashelmire 8y ago
It is outrageous that private corporate disputes over copyright result in jail time, rather than just financial or corporate sanctions. Edit: After reading Microsoft's blog post 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... and the e-mails Mr. Lundgren sent, however, it does seem pretty clear that he was trying to profit from these repair cds and sell them as, basically, genuine cds. US government brought the case through customs and it seems there was willful intent to defraud the government.
tux1968 8y ago
What's depressing is that this man was "selling" the copies for 25 cents in order to recover the cost of the physical CD he was burning -- not to enrich himself. This is a good guy being screwed over by Microsoft and the legal system.
- DanBC 8y ago
  No, he wasn't. He was selling some of the discs for $4, some for $10, and others for $30 to $40. He went out of his way to create discs that would fool customers into thinking they had a genuine microsoft product, and he went out of his way to evade customs. He knew that his product risked being siezed by customs, and he gave advice to his associates about evading customs inspections. He spent $80,000 creating the discs.
mynameisvlad 8y ago
This happened back in April: https://news.ycombinator.com/item?id=16921634 https://news.ycombinator.com/item?id=16921634
JadeNB 8y ago
In case you don't want to watch the video, here are the citations from the description: https://www.theverge.com/2018/4/25/17279190/microsoft-restore-disk-eric-lundgren-sentence-right-to-repair https://www.theverge.com/2018/4/25/17279190/microsoft-restor... http://www.latimes.com/business/technology/la-fi-microsoft-restore-disc-20180215-story.html http://www.latimes.com/business/technology/la-fi-microsoft-r... https://www.washingtonpost.com/news/true-crime/wp/2018/04/24/recycling-innovator-eric-lundgren-loses-appeal-on-computer-restore-discs-must-serve-15-month-prison-term https://www.washingtonpost.com/news/true-crime/wp/2018/04/24... https://www.seattletimes.com/nation-world/recycling-innovator-eric-lundgren-loses-appeal-on-computer-restore-discs-must-serve-15-month-prison-term https://www.seattletimes.com/nation-world/recycling-innovato...
krmmalik 8y ago
In around 2002, my father and I owned a computer assembly and repair business in a small town about 200 miles away from London, UK. We were doing just under $1.5m in revenue a year. I was just 22 years old. We had a few large clients that were contributing to the bulk of our revenue. Life was good. I can't get into the details of exactly how it happened because I dont want to open a new legal case or anything, but Microsoft used similar intimidation tactics to drive my father and I out of business, despite the fact that legally we hadnt done anything wrong. We got really scared. We were a small company and I was very young and we had no financial muscle comparative to Microsoft and as a result of the bad publicity etc, we lost our major clients anyhow. Microsoft drove us into the ground. A year before that, we had a major University in the UK as a client that defaulted on a payment for a large volume of inventory and left us to pick up the tab. Thankfully it didn't kill the business, but it certainly brought it to the teetering edge. This is how many larger institutions destroy the small player and why so many are afraid of going into Entrepreneurship. He has the most financial clout often tends to win. I have many other stories from other associates I could share too, but we really need people to step forward that have legal experience that can help the small player that doesnt have the financial clout for taking on the big boys, not to mention regulation needs to change but im not so hopeful for that. Just thought I'd share. I've not mentioned this anywhere public in over 15 years.
- WalterGR 8y ago
  In around 2002, my father and I owned a computer assembly and repair business in a small town about 200 miles away from London, UK. Why would Microsoft run a computer assembly and repair company into the ground, especially in 2002? That’s pretty hard to believe without there being more to the story.
  - teilo 8y ago
    This is almost certainly about OEM Windows licenses.
agumonkey 8y ago
Apparently there are more facts to this story https://www.reddit.com/r/videos/comments/8f9lsc/microsoft_sends_ewaste_recycler_to_prison_for_a/ https://www.reddit.com/r/videos/comments/8f9lsc/microsoft_se...
at-fates-hands 8y ago
FYI Microsoft didn't bring the case, ICE did. The main fact which a lot of people seem to be is he made these copies so he could sell them. The same ones you can get for free from Dell. Clifford Lundgren pled guilty to conspiring to traffic in counterfeit goods, in violation of 18 U.S.C. § 2320(a)(1), and criminal copyright infringement, in violation of 17 U.S.C. § 506(a)(1)(A) and 18 U.S.C. § 2319(a) and (b)(1). Lundgren’s plea related to his role in a scheme in which he created and intended to sell about 28,000 copies of Dell reinstallation discs for Microsoft Windows, without permission from Microsoft. He was making copies en masse in China then was shipping them back in an effort to resell them. I've read in various places the cost was in the neighborhood of 80K to make the copies. I'm not a business expert, but I don't know many people who put down 80K of their own money to create a product they're going to give away for free. Customs intercepted the discs when they were shipped and started investigated what was going on.
- giancarlostoro 8y ago
  Ouch. This makes more sense to me than Microsoft going after the man. I would hope they (Microsoft) wouldn't hunt down people doing this sort of thing.
  - DanBC 8y ago
    He wasn't just making and selling the discs (that people could get for free from the OEM), he was also giving instructions about how to make the discs more accurate copies of the original media, and how to evade customs. https://blogs.microsoft.com/uploads/prod/sites/5/2018/04/FINAL-FILED-BRIEF-11.17.17-004.pdf https://blogs.microsoft.com/uploads/prod/sites/5/2018/04/FIN... https://blogs.microsoft.com/uploads/prod/sites/5/2018/04/2LUNDGREN6.pdf https://blogs.microsoft.com/uploads/prod/sites/5/2018/04/2LU...
    - giancarlostoro 8y ago
      Yeah... that guy totally asked for jail time. It sucks because everytime I've read the whole case I missunderstood that it wasn't Microsoft specifically hunting him down and sadly others will make the same mistake as me. I'm someone who respects Microsoft, I cannot imagine people who already distrust Microsoft misunderstanding this completely for years to come.
btown 8y ago
The WaPo has a great writeup on this case, relevant quotes below: https://www.washingtonpost.com/news/true-crime/wp/2018/04/24/recycling-innovator-eric-lundgren-loses-appeal-on-computer-restore-discs-must-serve-15-month-prison-term/?noredirect=on&utm_term=.7758dc6a1885 https://www.washingtonpost.com/news/true-crime/wp/2018/04/24... """ The appeals court upheld a federal district judge’s ruling that the disks made by Eric Lundgren to restore Microsoft operating systems had a value of $25 apiece, even though they could be downloaded free and could be used only on computers with a valid Microsoft license. The U.S. Court of Appeals for the 11th Circuit initially granted Lundgren an emergency stay of his prison sentence, shortly before he was to surrender, but then affirmed his original 15-month sentence and $50,000 fine without hearing oral argument in a ruling issued April 11.... Glenn Weadock, a former expert witness for the government in its antitrust case against Microsoft, was asked, “In your opinion, without a code, either product key or COA [Certificate of Authenticity], what is the value of these reinstallation disks?” “Zero or near zero,” Weadock said. Why would anybody pay for one? Lundgren’s lawyer asked. “There is a convenience factor associated with them,” Weadock said. Still, [U.S. District Judge] Hurley decided Lundgren’s 28,000 restore disks had a value of $700,000, and that dollar amount qualified Lundgren for a 15-month term and a $50,000 fine. The judge said he disregarded Weadock’s testimony. “I don’t think anybody in that courtroom understood what a restore disk was,” Lundgren said. A three-judge panel of the 11th Circuit deferred to Hurley in his judgment that Weadock was not credible and that “while experts on both sides may have identified differences in functionality in the discs, [Hurley] did not clearly err in finding them substantially equivalent.” The ruling was written by Judges William H. Pryor Jr., Beverly B. Martin and R. Lanier Anderson. """
- DanBC 8y ago
  One of the reasons they put that value on the discs is because Lundgren was trying to sell the discs for that much. He spent $80,000 creating 16,000 discs. That's not "no value". ---begin--- COURT: What is your view why somebody is going to China to have 16,000 counterfeit discs produced? What do you think they are doing? Is this a charitable thing? I don’t mean to be—what is your take on this? You say it has no value, it might be convenient for the customer. What do you think is going on? They spent $80,000, if I understand one of the exhibits, to produce this. What do you think was happening? WEADOCK: I can’t speak for the Defendant, Your Honor. COURT: But you need to speak. You came in and told me, in your expert opinion, these have no value at all, which I understand that. WEADOCK: Right. COURT: Here is clearly a criminal enterprise, these gentlemen have pled guilty to crimes, and we know from the exhibits—again, I don’t have it right in front of me, but looking at the monies from Chase and so on, it is about $80,000. What is your sense as to what was being done? WEADOCK: My sense is that the discs have value as a convenience to the end user who will be able to install Windows on those computers. ---end Note that the customers didn't need these discs. They could have ordered replacements from the OEM.
ddtaylor 8y ago
Why is this thread marked as [Flagged] ?
- palebluedot 8y ago
  That means that users have flagged the story (I'm not sure how many user flags it takes for it to be marked "[flagged]", however).
- DanBC 8y ago
  Because the linked video is massively incorrect.
RaleyField 8y ago
People's take on this is depressingly cringeworthy. Prison time was for trying to pass CDs as genuine Microsoft media. Imagine this: You go to one of these shops looking to buy a new computer, you ask to get genuine copy of Windows. The shop can't guarantee genuine copy because they haven't compared hashes of these bootleg CDs with the ones published on Microsoft's website. If they did they would burn them themselves. Customers were unnecessarily put at risk because data on those disk wasn't assured to be genuine. That's why damages aren't based on manufacturing price but price customers paid for the genuine product. If you asked me I wouldn't fault them if they added damages for compromising combined purchases because people don't normally buy just software license but packages of hardware with genuine software. And the sad cringe is in the fact that when EVEN you people don't see why chain of custody is incredibly important then you can't expect all these shop owners to be any better.
RickJWagner 8y ago
Please support Open Source Software. It benefits us all.

36 points by kristoff_it 8y ago

manov 8y ago

[Video]??

agumonkey 8y ago

That's insane

kartan 8y ago

I agree with the point that having technology illiterate judges allows for abuse from technology companies. The fight of tech corporations against reuse of hardware it is ecologically sustainable. And finally, tech companies are negating the ownership of our own hardware. The software is licensed, hardware only works with certain software, so you don't own anymore what you buy. And laws are obsolete when it comes to this fact.

antoineMoPa 8y ago
You mean unsustainable?
- kartan 8y ago
  Yes. Thank you for the correction.

jesseryoung 8y ago

Microsoft higher ups should've stepped in earlier on this one. This is clearly a case of a guy trying to do right and help out customers and not understanding how the law treats software and how that's different than hardware. They could've easily cut him a deal where he could hand out genuine Windows licenses with the sale of these devices. It is legal (mostly) for you to pick up a piece of hardware that somebody threw away and do anything you want with it. You can legally use it yourself, sell it or just give it away. In the eyes of the law, software doesn't work that way. Could you pick up a software license key that somebody threw away and re-use it? Depending on the license the original person purchased, likely not. It sucks, I don't agree with it but it's how it is.

DanBC 8y ago
Have you read the emails that this man was sending? He was deliberately trying to fool his customers (who were asking for genuine MS discs, not some copy he'd made) and he was deliberately trying to evade customs. https://blogs.microsoft.com/uploads/prod/sites/5/2018/04/2LUNDGREN6.pdf https://blogs.microsoft.com/uploads/prod/sites/5/2018/04/2LU... https://blogs.microsoft.com/uploads/prod/sites/5/2018/04/FINAL-FILED-BRIEF-11.17.17-004.pdf https://blogs.microsoft.com/uploads/prod/sites/5/2018/04/FIN...
- jesseryoung 8y ago
  No I had not... Yeah, this guy was totally attempting to make a profit off of piracy.

ashelmire 8y ago

It is outrageous that private corporate disputes over copyright result in jail time, rather than just financial or corporate sanctions. Edit: After reading Microsoft's blog post 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... and the e-mails Mr. Lundgren sent, however, it does seem pretty clear that he was trying to profit from these repair cds and sell them as, basically, genuine cds. US government brought the case through customs and it seems there was willful intent to defraud the government.

tux1968 8y ago

What's depressing is that this man was "selling" the copies for 25 cents in order to recover the cost of the physical CD he was burning -- not to enrich himself. This is a good guy being screwed over by Microsoft and the legal system.

DanBC 8y ago
No, he wasn't. He was selling some of the discs for $4, some for $10, and others for $30 to $40. He went out of his way to create discs that would fool customers into thinking they had a genuine microsoft product, and he went out of his way to evade customs. He knew that his product risked being siezed by customs, and he gave advice to his associates about evading customs inspections. He spent $80,000 creating the discs.

mynameisvlad 8y ago

This happened back in April: https://news.ycombinator.com/item?id=16921634 https://news.ycombinator.com/item?id=16921634

JadeNB 8y ago

In case you don't want to watch the video, here are the citations from the description: https://www.theverge.com/2018/4/25/17279190/microsoft-restore-disk-eric-lundgren-sentence-right-to-repair https://www.theverge.com/2018/4/25/17279190/microsoft-restor... http://www.latimes.com/business/technology/la-fi-microsoft-restore-disc-20180215-story.html http://www.latimes.com/business/technology/la-fi-microsoft-r... https://www.washingtonpost.com/news/true-crime/wp/2018/04/24/recycling-innovator-eric-lundgren-loses-appeal-on-computer-restore-discs-must-serve-15-month-prison-term https://www.washingtonpost.com/news/true-crime/wp/2018/04/24... https://www.seattletimes.com/nation-world/recycling-innovator-eric-lundgren-loses-appeal-on-computer-restore-discs-must-serve-15-month-prison-term https://www.seattletimes.com/nation-world/recycling-innovato...

krmmalik 8y ago

In around 2002, my father and I owned a computer assembly and repair business in a small town about 200 miles away from London, UK. We were doing just under $1.5m in revenue a year. I was just 22 years old. We had a few large clients that were contributing to the bulk of our revenue. Life was good. I can't get into the details of exactly how it happened because I dont want to open a new legal case or anything, but Microsoft used similar intimidation tactics to drive my father and I out of business, despite the fact that legally we hadnt done anything wrong. We got really scared. We were a small company and I was very young and we had no financial muscle comparative to Microsoft and as a result of the bad publicity etc, we lost our major clients anyhow. Microsoft drove us into the ground. A year before that, we had a major University in the UK as a client that defaulted on a payment for a large volume of inventory and left us to pick up the tab. Thankfully it didn't kill the business, but it certainly brought it to the teetering edge. This is how many larger institutions destroy the small player and why so many are afraid of going into Entrepreneurship. He has the most financial clout often tends to win. I have many other stories from other associates I could share too, but we really need people to step forward that have legal experience that can help the small player that doesnt have the financial clout for taking on the big boys, not to mention regulation needs to change but im not so hopeful for that. Just thought I'd share. I've not mentioned this anywhere public in over 15 years.

WalterGR 8y ago
In around 2002, my father and I owned a computer assembly and repair business in a small town about 200 miles away from London, UK. Why would Microsoft run a computer assembly and repair company into the ground, especially in 2002? That’s pretty hard to believe without there being more to the story.
- teilo 8y ago
  This is almost certainly about OEM Windows licenses.

agumonkey 8y ago

Apparently there are more facts to this story https://www.reddit.com/r/videos/comments/8f9lsc/microsoft_sends_ewaste_recycler_to_prison_for_a/ https://www.reddit.com/r/videos/comments/8f9lsc/microsoft_se...

at-fates-hands 8y ago

FYI Microsoft didn't bring the case, ICE did. The main fact which a lot of people seem to be is he made these copies so he could sell them. The same ones you can get for free from Dell. Clifford Lundgren pled guilty to conspiring to traffic in counterfeit goods, in violation of 18 U.S.C. § 2320(a)(1), and criminal copyright infringement, in violation of 17 U.S.C. § 506(a)(1)(A) and 18 U.S.C. § 2319(a) and (b)(1). Lundgren’s plea related to his role in a scheme in which he created and intended to sell about 28,000 copies of Dell reinstallation discs for Microsoft Windows, without permission from Microsoft. He was making copies en masse in China then was shipping them back in an effort to resell them. I've read in various places the cost was in the neighborhood of 80K to make the copies. I'm not a business expert, but I don't know many people who put down 80K of their own money to create a product they're going to give away for free. Customs intercepted the discs when they were shipped and started investigated what was going on.

giancarlostoro 8y ago
Ouch. This makes more sense to me than Microsoft going after the man. I would hope they (Microsoft) wouldn't hunt down people doing this sort of thing.
- DanBC 8y ago
  He wasn't just making and selling the discs (that people could get for free from the OEM), he was also giving instructions about how to make the discs more accurate copies of the original media, and how to evade customs. https://blogs.microsoft.com/uploads/prod/sites/5/2018/04/FINAL-FILED-BRIEF-11.17.17-004.pdf https://blogs.microsoft.com/uploads/prod/sites/5/2018/04/FIN... https://blogs.microsoft.com/uploads/prod/sites/5/2018/04/2LUNDGREN6.pdf https://blogs.microsoft.com/uploads/prod/sites/5/2018/04/2LU...
  - giancarlostoro 8y ago
    Yeah... that guy totally asked for jail time. It sucks because everytime I've read the whole case I missunderstood that it wasn't Microsoft specifically hunting him down and sadly others will make the same mistake as me. I'm someone who respects Microsoft, I cannot imagine people who already distrust Microsoft misunderstanding this completely for years to come.

btown 8y ago

The WaPo has a great writeup on this case, relevant quotes below: https://www.washingtonpost.com/news/true-crime/wp/2018/04/24/recycling-innovator-eric-lundgren-loses-appeal-on-computer-restore-discs-must-serve-15-month-prison-term/?noredirect=on&utm_term=.7758dc6a1885 https://www.washingtonpost.com/news/true-crime/wp/2018/04/24... """ The appeals court upheld a federal district judge’s ruling that the disks made by Eric Lundgren to restore Microsoft operating systems had a value of $25 apiece, even though they could be downloaded free and could be used only on computers with a valid Microsoft license. The U.S. Court of Appeals for the 11th Circuit initially granted Lundgren an emergency stay of his prison sentence, shortly before he was to surrender, but then affirmed his original 15-month sentence and $50,000 fine without hearing oral argument in a ruling issued April 11.... Glenn Weadock, a former expert witness for the government in its antitrust case against Microsoft, was asked, “In your opinion, without a code, either product key or COA [Certificate of Authenticity], what is the value of these reinstallation disks?” “Zero or near zero,” Weadock said. Why would anybody pay for one? Lundgren’s lawyer asked. “There is a convenience factor associated with them,” Weadock said. Still, [U.S. District Judge] Hurley decided Lundgren’s 28,000 restore disks had a value of $700,000, and that dollar amount qualified Lundgren for a 15-month term and a $50,000 fine. The judge said he disregarded Weadock’s testimony. “I don’t think anybody in that courtroom understood what a restore disk was,” Lundgren said. A three-judge panel of the 11th Circuit deferred to Hurley in his judgment that Weadock was not credible and that “while experts on both sides may have identified differences in functionality in the discs, [Hurley] did not clearly err in finding them substantially equivalent.” The ruling was written by Judges William H. Pryor Jr., Beverly B. Martin and R. Lanier Anderson. """

DanBC 8y ago
One of the reasons they put that value on the discs is because Lundgren was trying to sell the discs for that much. He spent $80,000 creating 16,000 discs. That's not "no value". ---begin--- COURT: What is your view why somebody is going to China to have 16,000 counterfeit discs produced? What do you think they are doing? Is this a charitable thing? I don’t mean to be—what is your take on this? You say it has no value, it might be convenient for the customer. What do you think is going on? They spent $80,000, if I understand one of the exhibits, to produce this. What do you think was happening? WEADOCK: I can’t speak for the Defendant, Your Honor. COURT: But you need to speak. You came in and told me, in your expert opinion, these have no value at all, which I understand that. WEADOCK: Right. COURT: Here is clearly a criminal enterprise, these gentlemen have pled guilty to crimes, and we know from the exhibits—again, I don’t have it right in front of me, but looking at the monies from Chase and so on, it is about $80,000. What is your sense as to what was being done? WEADOCK: My sense is that the discs have value as a convenience to the end user who will be able to install Windows on those computers. ---end Note that the customers didn't need these discs. They could have ordered replacements from the OEM.

ddtaylor 8y ago

Why is this thread marked as [Flagged] ?

palebluedot 8y ago
That means that users have flagged the story (I'm not sure how many user flags it takes for it to be marked "[flagged]", however).
DanBC 8y ago
Because the linked video is massively incorrect.

RaleyField 8y ago

People's take on this is depressingly cringeworthy. Prison time was for trying to pass CDs as genuine Microsoft media. Imagine this: You go to one of these shops looking to buy a new computer, you ask to get genuine copy of Windows. The shop can't guarantee genuine copy because they haven't compared hashes of these bootleg CDs with the ones published on Microsoft's website. If they did they would burn them themselves. Customers were unnecessarily put at risk because data on those disk wasn't assured to be genuine. That's why damages aren't based on manufacturing price but price customers paid for the genuine product. If you asked me I wouldn't fault them if they added damages for compromising combined purchases because people don't normally buy just software license but packages of hardware with genuine software. And the sad cringe is in the fact that when EVEN you people don't see why chain of custody is incredibly important then you can't expect all these shop owners to be any better.

RickJWagner 8y ago

Please support Open Source Software. It benefits us all.