[mchannon]

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.

[sailingparrot]

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

Source for that?

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

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

and

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

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

[mchannon]

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.

[WalterGR]

Source that Microsoft lied? Gov Exhibit 17. There are probably many more.

I'm not finding this via Google searches... What incantation should I use?

Which parts of the exhibit are you referring to?

[edit: I did find this, which is from the defense. The defense doesn't claim that Microsoft stated that the value of each restore disk was $25.

"The Government provided no proof of the price at which the Microsoft software was sold in any market without a license or product key. Indeed, the Court had no proof that Windows software was ever sold in any market at any price without a license or product key. Thus, the Court had no basis to determine the retail value of the infringed item, i.e., the Microsoft software without a license or product key. With no proof of the retail value of the infringed item, the Court was left to assume that the Windows software without a license and product key had the exact same retail value as an installation disc with Windows software, a license, and a product key sold to refurbishers. In concluding that the infringement value of the software was $25 - the price charged to refurbishers for an installation disc with copy of the Windows software together with a license and a product key – the Court apparently did so." https://resource-recycling.com/e-scrap/wp-content/uploads/si... ]

There are about three or four lies on there, which anybody familiar with the computer recycling business can confirm.

For those of us who aren't familiar with the computer recycling business (myself included) could you confirm them?

The rest of your comment is speculation.

[otakucode]

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

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

[mchannon]

+1 for mentioning the interview, but a link would've been helpful.

https://www.youtube.com/watch?v=S7hnVYMoctM

Microsoft did claim they were worth $20, according to Gov. Exhibit 17. Most of your argument is thus false.

District and appellate judges don't always make the right decisions, but that's what rehearings and the Supreme Court are for.

[WalterGR]

Could you please link to a time code or mention which time to seek to? The video is 2 hours long.

While I'm here, here are the popular discussions about this story from the last week:

“Microsoft attempts to spin its role in counterfeiting case” - 195 points - 2 days ago - 144 comments. https://news.ycombinator.com/item?id=16946478

“Microsoft Convinces Judges to Jail Man for Copying Software It Gives Out Free” - 71 points - 3 days ago - 22 comments. https://news.ycombinator.com/item?id=16940722

“ ‘E-waste’ activist gets 15 months in prison for selling Windows restore disks” - 86 points - 4 days ago - 11 comments. https://news.ycombinator.com/item?id=16924587

“E-waste recycler loses appeal on computer restore disks, must serve prison term” - 388 points - 5 days ago - 257 comments. https://news.ycombinator.com/item?id=16921634

[tripletao]

> Microsoft did claim they were worth $20, according to Gov. Exhibit 17. Most of your argument is thus false.

Microsoft thinks that the OEM license disappears if the original install media (CD or recovery partition) are lost. Your options at that point are to either (a) get a new OEM CD from the manufacturer, in which case the original license becomes valid again, or (b) buy a new license, for $20. I don't know enough about how Windows is licensed to say whether that's legally correct, but it's Microsoft's position.

Assuming that's correct, his customers thought they had a compliant license, because they thought they'd bought (a). They actually didn't, because the CD--even though it was bit-for-bit identical to the authentic one--had the wrong provenance. If his fake OEM CDs didn't exist, and the real OEM CDs weren't available either (which is apparently the case), then the customer's next best option would have been to buy a new license. Microsoft is claiming not that each of his disks was worth $20, but that each disk cost Microsoft $20 in revenue, because everyone who bought his fake OEM disk would have bought a real $20 license instead.

I still think the sentence is disproportionate and stupid, and the convoluted legal situation of Microsoft's own making seems to me like a good reason to depart from the sentencing guidelines (which already seem high to me). I'm not sure the $20 is as wrong as the article makes out.

[syshum]

> (b) buy a new license, for $20

There is no way for a consumer, buy a new license for $20. Their is program for Register Referbishers that allows a MRR to get a replacement COA, Create Restore Media, etc for $25. (note this is NOT a new license, in order to quality for this the PC has to have a OEM License) and requires a 14 page contract with MS that has all kinds of conditions and requirements on the person

https://www.msregrefurb.com/RRPSite/Templates/RR_ProgramAgre...

>Assuming that's correct,

I believe this to be a false assumption on your part. The License does not magically disappear if the Restore CD was lost, especially given the fact that I am not aware of any system on the market today that actually comes with a physical Restore CD anymore

[tripletao]

> There is no way for a consumer, buy a new license for $20. That is program for Register Referbishers, and requires a 14 page contract with MS that has all kinds of conditions and requirements on the person

I think Microsoft is alleging that his CDs are designed for refurbishers who think they're getting the authentic OEM disk.

> I believe this to be a false assumption on your part. The License does not magically disappear if the Restore CD was lost, especially given the fact that I am not aware of any system on the market today that actually comes with a physical Restore CD anymore

I don't know the law well enough to comment, but Microsoft thinks it does:

> A new Windows license is not required for a refurbished PC that has:

> 1. The original Certificate of Authenticity (COA) for a Windows operating system affixed to the PC, and

> 2. The original recovery media or hard-disk based recovery image associated with the PC.

[...]

> A new Windows license is required for a refurbished PC if:

> 1. The refurbisher did not obtain the original recovery media along with the system to be refurbished or

> 2. The PC does not have a hard-disk based recovery image

https://www.msregrefurb.com/RRPSite/Information/LicensingGui...

So is Microsoft misinterpreting its own contracts? Is this in the contract with Microsoft refurbishers, but not Windows licensees in general? Is the contract unenforceable? Something else? This is the point where I need a lawyer...

[otakucode]

Exhibit 17 does not contain any claim by Microsoft that the recovery discs were worth $20. I just re-checked it to see. They said, as is the case, that the closest item they sell is the software with the license. The court determined the license to be irrelevant (they are wrong about that of course but that changes nothing about what Microsoft claimed).

Also, no, it does not invalidate any other statement as the other statements were not about Microsofts claims about the value of the discs. Even if I was completely and totally wrong on that point, it would not have the slightest relevance to any other claim or point not based on that point. That's just not how argument works. A person can say a wrong thing and then a right thing and the wrong one doesn't invalidate the other.

Lundgren has no intention to continue the appeals process. He claims that his counsel tells him that it wouldn't be fruitful. I personally think he could win an appeal insofar as his sentencing goes, but it would not change his sentencing much at all. He certainly wouldn't be walking free after having engaged in conspiracy and trafficking in counterfeit goods. The sentence he received was already below the recommended guideline the court follows derived from the value of the counterfeited goods.

[emodendroket]

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

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

[pasbesoin]

There is a broader push to criminalize IP enforcement.

Part of a very troubling trend.

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

Rent seekers, consolidating their monopolies.