Re: Oh, come on
>But that software had been paid for already?
You are getting confused between what is actually on the PC and the Recovery media.
As a private individual you can legitimately sell your old laptop complete with its pre-existing Windows install, attached OEM COA along with the master set of recovery media either supplied with the system by the OEM or created by you from the Recovery partition for your own use, these rights have been granted to you by Microsoft under the EULA.
Whilst real information about this case is hard to come by, it seems the real issue is the reproduction and distribution rights for the Recovery Media. From what we know they burnt 28,000 copies of Windows recovery discs with the intent of distributing them with refurbished PCs. By burning 28,000 disks it is clear this isn't for "personal usage", this is for business/gain; particularly as their stated intent was to distribute the disks with refurbished PCs.
As an OEM or Small Systems Builder, I get to purchase Windows licences at a discount on the basis that I provide certain services and to enable me to deliver these services MS grant me certain rights. One of these rights enables me to use MS branding in certain ways, another legally incorporate MS products into my own branded Recovery Media and to reproduce and distribute said media.
So I suspect because the guys didn't have either an agreement with Dell or Microsoft, they didn't have their permission to reproduce and distribute their IP and hence they effectively produced 28,000 counterfeit disks. As is the case with say grey import/counterfeit Levi's (made in the same factory and totally identical to the real thing) this is a trading standards issue and hence all MS or anyone has to do is to inform trading standards, who will then prosecute the case, calling on you as a witness. If you have observed markets where stall holders are selling counterfeit movie DVD's, it is Trading Standards people supported by the police who did the searches and initiated prosecutions.