[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.