back to article PC recycler gets 15 months in the clink for whipping up 28,000 bootleg Windows 7, XP recovery discs

PC reseller Eric Lundgren will spend up to 15 months behind bars after a US Court of Appeals upheld his sentence on charges of conspiracy to traffic in counterfeit goods and criminal copyright infringement. A three-judge panel with the Eleventh Circuit this month ruled in favor of a southern Florida district court's 15-month …

Microsoft isn't Adobe

Could be wrong... but I believe no Adobe licence is transferrable, even if it's Macromedia software.

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Boffin

Re: Microsoft isn't Adobe

IANAL, however, any software license is transferable provided you live in a civilized jurisdiction, such as the EU. You might have to fight this in court, but legal precedents have already been set ... This, of course, regardless what is written in the EULA.

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Re: Microsoft isn't Adobe

Actually Adobe *does* let you transfer licences. You have to sign a document and send them a digitised copy thereof that certifies you have transferred the licence to so-and-so (with their details), for whom (if they don't exist yet) an Adobe account will be opened and the licence is transferred to.

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Re: Microsoft isn't Adobe

"This counterfeit software exposes people who purchase recycled PCs to malware and other forms of cybercrime"

I surprised Microsoft would be quite so denigrating of their own software!

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Re: Microsoft isn't Adobe

"I surprised Microsoft would be quite so denigrating of their own software!"

They are when it's a version of Windows they no longer want consumers to use.

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not been part of the reseller program

the main issue here was these was made very well made was not just MS as well it had Dell HP and other official recovery disks(the HP dell and so on OEM ones actually self activate on respected manufacturer), but the thing is they actually did not get him for that(branding on the disk), it was for selling them for $25 each, witch is the price of the windows Genuine reseller program per PC

most shops in the UK that sell used pcs are signed up to it so they effectively get a windows 10 home or pro key (it can have any version of windows OEM Key on the system even if its windows 8 UEFI key) for £15 to "refurbish" the pc (which is not bad really, but you can get them for less than $5/£2 elsewhere)

even if he had not made the disks look original they probably would of got him for selling it anyway

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Heavy handed indeed

On the other hand if he really wanted to sell them with a Windows CD, he should have phone Microsoft for a special deal on upgrade discs. He could equally have just included a booklet explaining how to download the recovery image.

Mind you hindsight is a wonderful thing since it is so often less wrong than foresight.

Much better if he had converted them all to Linux. I am sure he would have had a ready market for people who want to use it but aren't prepared to trash a working copy of Windows no matter how many versions out of date.

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Linux

Re: Heavy handed indeed

" he should have phone Microsoft for a special deal on upgrade discs"

He probably couldn't. Because, win-10-nic.

a) why buy an old PC with win-10-nic as your only option? If it were me, Windows 7 would be the ONLY reason to get the machine!

b) Micro-shaft won't sell what people want. This was a marketing opportunity to give the public something they want instead of what MICRO-SHAFT wants them to have

c) old hardware might not work with Win-10-nic, regardless of the claims

My opinion: he should've shipped them with Linux, and let people figure out what they want to do afterwards.

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Anonymous Coward

Re: Heavy handed indeed

What is "Win-10-nic"?

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Re: Heavy handed indeed

I'm not sure here. From what I understood in the article he could get the correct recovery discs. But would have to have paid 25 for each disc.

I wonder if he could have downloaded the image and restored it to the machines himself so as to not need the discs for the end users?

Or... Did he know that he could get the discs? Not that I imagine that defense would have helped on court...

But I'm still against copyright as a criminal offence. Surely these should be a civil case? And a prison sentence is OTT...

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Re: Heavy handed indeed

What is "Win-10-nic"?

I'm going to reach here, but I think it's a play on Titanic (Ti-10-nic / Win-10-nic). Yeah. I'ts pretty rubbish. The sort of thing you expect from somebody who bought a nuclear bunker to live in and only comes out to buy canned goods, to vote and to foam at the mouth.

Hmm. Hi, Bob!

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Anonymous Coward

Re: Heavy handed indeed

Dang... you must really love that "SHAFT" if you keep bringing it up that much, but why so angry?

My opinion: You're just angry because that "SHAFT" is too small for you, and no matter how much you try to make it bigger by capitalizing those letters, you can't change the fact that it's "MICRO".

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Re: Heavy handed indeed

"windows Genuine reseller program" is what he needed to be on (witch is around $20 per PC)

the way it works what every key is on the system ,XP vista 7 8 or even windows 10 (but you just don't bother with windows 8 or 10 systems as the system is already activated for windows 10 if it has windows 8 UEFI key {assuming its a branded system} or windows 10 before installed just automatically activates)

they accept it and give you the currant version of windows (at this time windows 10 home or pro depending on the key you provide them)

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Completely bonkers

The iso images are available for free download, since this was an effort by the manufacturers to lower their cost in the cutthroat PC markets of yesteryear. How in any way can someone downloading these images for the machines they were intended for be in any way illegal ?

How can they be fakes any more than the ones that anyone else downloads for the purpose of reinstalling. I thought that the licence key was the bit that really mattered

The real point here is that MS are trying to get sales of new machines. When will they realise that the right thing to do is to maximise the useful life of the machines, since not everyone needs a top spec machine. They should be happy that people are still using Windows.

You have to wonder if this is another attempt to push sales of Windows 10 by sending perfectly serviceable but older machines to the scrap pile for purely business reasons. Stuff the planet, at least we are making a tidy profit.

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Anonymous Coward

Re: Completely bonkers

I believe the issue here is that he had the discs professionally produced complete with microsoft logo's etc making it appear that the disc itself was produced and distributed by microsoft.

while the iso images for recovery discs were / are freely downloadable if you want that iso on an official microsoft disc it will cost you $25

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WTF?

Re: Completely bonkers

... wonder if this is another attempt to push sales of Windows 10 by sending perfectly serviceable but older machines to the scrap pile ...

Wonder?

Attempt?

You are joking, right?

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Re: Completely bonkers

He had them professionally printed in a way that they looked like the Microsoft ones. If he'd printed them professionally with 'Eric's recovery CD imaged from Microsoft's ISO' on it, that would've been another story. But he didn't. He made them look like they were the real deal, and apparently also sold them to resellers. Handing away, sure, selling, no. That's why Microsoft and the feds got annoyed.

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Re: Completely bonkers

This. He apparently intended to keep that 'genuine' tag, which was the opposite of true. I wonder if he also sprung for the "Genuine Microsoft" holograms in the discs' layers, if that was even available from the press in China, and how much extra that costs.

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Re: Completely bonkers

He was also selling it to re sellers.

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DJO
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Re: Completely bonkers

making it appear that the disc itself was produced and distributed by microsoft.

Yes, that's "passing off". If he had had the media labelled with his company name he would not have been guilty of anything.

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Re: Completely bonkers

@Dwarf

Lets look at your points one at a time (Using the article as source for my responses)

"The iso images are available for free download, since this was an effort by the manufacturers to lower their cost in the cutthroat PC markets of yesteryear. How in any way can someone downloading these images for the machines they were intended for be in any way illegal ?"

Its not *if the end consumer does it themselves* You, or I or anyone can download a windows iso image and use it to set up a PC (License assumed to be owned) however a *reseller* has different requirements their options are :

1. Just provide the PC and nothing else.

2. Provide the PC and a document describing how to download your own image.

3. Put a copy of the Microsoft media creation tool on the machine with some instructions.

4. Create a recovery partition on the machine and use some image based backup of the initial state of the machine on there (Ive used Norton Ghost and clonezilla (free) for this in the past.

5. Sysprep the machine (Tbf Ive not done that since XP so dont know if its still an option)

6. Buy the licenced disks from microsoft as a reseller and pass the price on to the customer

7. Buy the licenced disks from microsoft as a reseller and absorb the price.

From the article :

"Normal end-users are allowed to download and use the recovery images for free. Resellers aren't allowed to download and redistribute them for free."

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"How can they be fakes any more than the ones that anyone else downloads for the purpose of reinstalling. I thought that the licence key was the bit that really mattered."

Well, Ive not seen the disks but from the article :

"You see, these discs weren't your average burnt copies labeled with magic marker. The court noted that Lundgren had the discs printed professionally overseas with labels that claimed they were authorized copies of the restore media"

So there are two issues here really -

1. Not paying MS the fee for proper media (as a reseller he should have paid $25 per disk - but would get discount at those volumes.

2. Sticking a MS logo on the disks that he did distribute

If he had just had the disks printed with "Daves Recycled PC Recovery disk" and his own logo he'd probably have been OK.

"The real point here is that MS are trying to get sales of new machines. When will they realise that the right thing to do is to maximise the useful life of the machines, since not everyone needs a top spec machine. They should be happy that people are still using Windows."

From the article :

"US Customs and Border Protection seized the shipment of CDs when it arrived from China, and accused Lundgren of counterfeiting."

So customs started the process.. not MS.

In fact no where in the article does it say that MS had anything to do with the case. It was the US govt that took this guy to court, Im sure MS were involved at some point, but its hardly them instigating and pushing for charges.

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"You have to wonder if this is another attempt to push sales of Windows 10 by sending perfectly serviceable but older machines to the scrap pile for purely business reasons. Stuff the planet, at least we are making a tidy profit."

Highly unlikely seeing as MS give vendors lots of ways to provide users with recovery options completely free, again from the article :

"...and the restore software is made available for free by Microsoft."

----

So if you'd like to take a few deep breaths and try to think rationally about this for a moment you might see that this isn't a big conspiracy by the evil M$ its quite a simple case of copyright infringement and sale of counterfeit goods.

If you still don't have a problem with that I have some Kevin Clone jeans to sell you...

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Re: Completely bonkers

"Legit" copies of Dell restore CDs go for $5 to $10 a pop on Ebay. Prison seems heavy handed, but I tend to agree, Lundgren's decision to make the discs appear to be original OEM sort of breaks his credibility, for me, at least. Even if he never intended to sell the discs separately, he's still basically taking a $25 Ebay sale and turning it into a $150 sale by conning customers into believing they're getting a full MS license and legit restore media with the system.

Sending the dude to prison is another thing entirely. MS could just as easily have threatened him with a lawsuit and politely and publicly requested he destroy the CDs. Instead, we have a guy being punished for doing something that Dell and MS should've been doing all along - which is creating a system that keeps working PCs out of landfills in the first place.

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Re: Completely bonkers

i agree the jail part was way to far, but this is how the USA justice system works to make more money, they could of at point when they seized the items they could of contacted him (most likely police at the door) and gave him a fine and told him it was completely illegal what he was doing (just losing the $80K would of been bad enough)

what they actually got him for was trying to sell them for $25 each

the branding on the disk was another way MS could of taken legally but the judge sided with MS because of everything he had done to get the disks was testament to mass selling of counterfeit goods,

he really should of checked if it was even remotely legal to even do this before he did it sometimes not been aware that something is illegal when you really should know its going to be illegal does not get you off free (but Jail for this No that was bad call by the judge large fine yes but not the amount MS was asking for)

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ehm, I sort of assumed it would be like MS retail discs. I didn't notice the photo of the Exhibit 4 Dell-like disc, which I'm pretty sure never has those features and is just like any common pressed DVD, last time I checked. Still, the label...

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"Redmond also sells the discs to re-sellers for $25 each"

Is that $25 for a disc including the license or just the disc? If they are charging $25 for just a DVD no wonder the guy got his own pressed, the cost of manufacturer and distribution for MS will be pennies per disc.

From when i looked into the licensing rules a few years ago, MS say you can only sell a used or refurbished PC with Windows pre-installed if it comes with the original install media that came with the computer even if it has a COA product key sticker you can't just use your own CD. If you don't have the original media you have to either sell it without Windows installed or pay for a Microsoft Refurbisher license which is essential another full Windows license for the PC. And if the reinstall media was a recovery partition on the hard drive, that still needs to be there. So if you don't have an original disk you can't wipe the drive before you sell your PC unless you backup the recover partition and restore it back after erasing the hdd.

So probably 99% of the used and refurb PCs you see for sale on ebay are breaching MS license rules as I doubt they will come with the original disks.

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That's still correct. the OEM copy of windows xp and windows 7 can only be used ONCE. If you are a company that refurbishes the machines for resale, you have to put the refurbisher COA sticker on it (along with technically removing the OEM COA).

MS has since gotten... _worse_ in regards to what you can and can not do with the OEM COA keys.

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mark l 2 I worked for charity and MS told us two things we a can reload windows on it provided we had a COA and we did not sell over a certain amount. We could also buy upgrade COA stickers or refurbished COA stickers . The refurbished COA would cost a $5 a pop but they computers had to meet certain standards.

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Lenvo does not remove the old COA. the school district we have has a stack of lenvo units that either have refurb or upgrade COAs on them and you clearly can see the old COA

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you don't remove the old COE key when your part of the refurbish program (windows 10 refurb you just put the windows 10 logo sticker on it as its digitally activated once you used the key on it you get in the email, you don't get an actual windows 10 sticker key just a logo stickers that they send you in a packs of 50s i think)

if the system was factory windows 8 (key is stored in the UEFI bios witch windows 10 uses, still a free windows 10 upgrade) or windows 10 just straight install windows 10 it will digitally activate with the relevant version (if it has pro on it you might have to install windows 10 pro for it to self activate)

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Sounds like it's mainly the labeling

I wonder, if he had printed his own plain-looking labels with something like "System Restore Disk" on them, would he have been prosecuted, or lost if he were prosecuted? The thing the court seemed to object to was the labeling of the disks, implying they were created by M$, rather than the fact he was giving out what were freely available software images.

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Windows

Can't sell without the original media?

In which case he was faking the original media to make it seem legitimate.

Given that you could buy it and download your own media there is a partial logical disconnect here. Sell it WITHOUT Windows installed but with instructions seems fine. Just with Windows preinstalled is against the rules. Bloody dodgy M$ tactics.

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Playing the malware card seemed pretty low. They didn't prove that there *was* any malware, just that disks might have malware. An argument to make when you don't have a strong case based in fact.

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MS admits Windows is dangerous

If the checksums match, the risks are the exactly same for the genuine software.

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Pirate

A little analogy for you

I'm selling dodgy meat from an unlicensed back-street abattoir, and labelling it as Tesco's Finest.

It is not fair that I be prosecuted on the basis that there *may* be botulism on it. They have to prove that there *was* botulism on it. I'm happy for my customers to bear the risks of my dodgy meat, and I should only get prosecuted once there's a few deaths first.

Suggestions that I might kill someone is just playing the botulism card, and pretty low.

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Anonymous Coward

Re: A little analogy for you

Labelling it as Tesco Finest is still passing off. However, here it's akin to someone photocopying books for people who lost the originals in a fire... Still an "illegal" copy... but was there any loss to the original seller? Should we imprison people for being charitable?

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Childcatcher

Can someone please explain

In a US court context what "Eleventh Circuit" means? Is it the 11th court in a jurisdiction's hierarchy or is it simply "court no 11" in this jurisdiction/county/state/whatever? My guess is something else entirely.

I'm familiar with the Westminsterish terms of Magistrates, District, Supreme and High courts (your results and nomenclature may vary based on jurisdiction) but when I hear terms like "xx circuit of appeals" in a US I'm a little confused.

Cheers :)

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pdh

Re: Can someone please explain

http://www.uscourts.gov/about-federal-courts/court-role-and-structure

"There are 13 appellate courts that sit below the U.S. Supreme Court, and they are called the U.S. Courts of Appeals." There's a map on the page that shows the boundaries of the different appellate courts.

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Re: Can someone please explain

Ahhh that makes sense. Thank you. So this fellow in Florida sees the 11th circuit, and a guy in Arizona sees the 9th circuit.

So where does a small offence (I think it's called a misdemeanour?) go? Straight to District circuit or some "lesser" court that isnt listed on there?

In Westminsterish systems, everyone sees the Magistrate's court first and then if it's above their jurisdiction (ie rape, murder or treason) then it is referred to the higher court which could be District or Supreme based on severity. Someone on a minor summary offence would just be dealt with in the Magistrate's court.

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Re: Can someone please explain

"So where does a small offence (I think it's called a misdemeanour?) go? Straight to District circuit or some "lesser" court that isnt listed on there?"

USAland has two completely independent court systems.

Probably 95%+ of all trials are in state court systems. State court organization varies by state; many have municipal (minor things like traffic offenses), county (arrestable offenses and minor lawsuits), and state courts (major crimes and large-amount lawsuits) as well as various appeals courts. The state I currently live in has a unified court system run entirely by the state - organized as minor district courts, various specialty courts (family law, juvenile courts, etc), superior courts (major offenses/suits) and appeals courts. As an extreme example of variation, Louisiana has a mixed British common-law and French civil-law system.

If you violate a federal law, or for a variety of across-state-lines reasons, you can get into federal court. There are district courts (one to a handful locations in each state - so you see courts like "the Southern District of New York"), mostly regional appeals courts, and the US supreme court. There are also lower-level "magistrate judges" who can handle various hearings for district court judges, and can also preside at misdemeanor federal trials.

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Re: Can someone please explain

USAland has two completely independent court systems.

It's more accurate to say that it has 51 completely independent court systems. Each state has its own court system, and those systems, despite a fairly broad similarity, are not all the same. Louisiana in particular is different because the *state* legal system is based on French rather than English principles.

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Rebuy Windows

I remember that years ago you had to rebuy Windows if you changed the motherboard. Microsoft can demand what it likes, it is their IP. I would install Linux on those machines and if you want Windows download the image yourself and install it yourself. Why take the risk?

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Re: Rebuy Windows

There were ways to fix it once Windows threw a fit, but I remember more than once having dying harddrives I managed to salvage and get re-imaged onto new ones (a certain nicely-cheap Maxtor drive had early batches with bad controller cards, but once that card failed, temporarily swapping it out with another would let you get at the data again before sending it for warranty) only then to have to deal with the hassle of Windows XP deciding I was no longer using a Genuine copy of Windows. All my friends who just pirated Windows had no such troubles . . .

Personally, that was one of the big things that made me finally switch over to Linux. (The other half of it was that, having booted into Knoppix for this when it was my C: drive that had failed, I started getting used to how much nicer the desktop environment and default software was. Tabbed file browsing blew my mind . . . and is still absent from Windows, a decade and a half later!)

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Re: Rebuy Windows

> remember that years ago you had to rebuy Windows if you changed the motherboard<

I remember that years ago you had to rebuy Windows if you changed the motherboard and were ignorant and didn't know any better and didn't know what you were doing.

OEM systems were, and still are, only valid for the original equipment. More recent OEM equipment from major companies like DELL is tied to DELL licences built into the motherboard, so if you changed your DELL motherboard to a non-DELL motherboard you would have to re-licence.

I know that there are a lot of ignorant people out there. I try to build systems that work even for ignorant stupid people. In order to do that, you have to identify what the actual problem is.

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Headmaster

Re: Rebuy Windows

No, you could ring them. A free number, certainly in Ireland, that worked with a real human at 3am. The "agent" would ask for existing key, ask what you did and read you out a new key.

Yes, a key could be become invalid. No, you didn't have to pay a cent.

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Anonymous Coward

Re: Rebuy Windows

"More recent OEM equipment from major companies like DELL is tied to DELL licences built into the motherboard,"

Not really recent, that has been since XP days. There is an OEM VL key (SLP) in the BIOS, you use the matching OEM SLP files on the installation and its activated. There are different versions of these keys for each OEM which will activate the different versions of windows. Its possible, if wanted, to add these keys into most systems.

"so if you changed your DELL motherboard to a non-DELL motherboard you would have to re-licence"

Then you would use the provided key to activate the OEM license (it hasn't been used, the SLP has). The OEM key has 1 activation and can't be moved, it hasn't been used yet, just provided on the label on your system.

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Re: Rebuy Windows

" remember that years ago you had to rebuy Windows if you changed the motherboard. Microsoft can demand what it likes, it is their IP"

That comes down to the argument of "What constitutes a new PC" because the COA on a PC is tied to the hardware - if you want(ed) a hardware independent licence you had to buy a retail version.

As it is MS have always been quite good (at least to me) when doing upgrades - On the occasions where I couldn't re-activate a copy of windows after a hardware change it was a matter of a 5 minute phone call to a free phone number and a bit of an explanation. In fact I STILL have a COA on one of the kids PCs that is a bit of a "triggers broom" in that no part of it hasn't been replaced over the years.. well thats not 100% accurate - Ive reused the sata cables.

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Pirate

He didn't make 28K pirate copies. He merely infringed trademark.

Another lesson in how the law is not the same as right, fair or moral...

Since the program is provided free of charge, M$'s $25 fee is for duplication and shipping of that free software on a CD. It only works by burning it onto a boot CD. You can pay them to make you a disc, make your own disc, or you can have the kid next door to do it for you. Or anyone else.

Making the discs seem official was a dumb move though. And it seems more like they should have calculated his time based on how much he profited from the discs ($0). Or how much M$ provably "lost" in sales rather than assuming the maximum physically possible. [That's kind of funny, actually, assuming that all of the discs would surely be used. Not a good endorsement of M$... :D ]

I'm sure it comes down to the construction of the law, BUT I take a dim view of letting "victims" declare damages without providing any proof.

On the other hand, I wonder if the judge did him a favor charging him with $700k of pirate software instead of 28k instances of trademark infringement?

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Headmaster

XP?

Call me thick, dense whatever, but an EOL'd OS can still be licensed? Does MS License server still validate an XP install?

Aren't there more important things for the courts to be doing?

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Re: XP?

Call me thick, dense whatever, but an EOL'd OS can still be licensed?

EOL means "no support", not "we don't continue to own it".

Does MS License server still validate an XP install?

Yes.

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Pirate

I'm Really Not Sure If...

On a brief two - three day contract threw a whole load of WIN98SE discs (& possibly keys) into the skip or not attached to new or now surplus kit.

It was a tidy up operation at a Insurance co that wouldn't make a drama out of a crisis, having suffered a misfortune in a flooded floor or three & people played swap the LJIII's around in the hope that printing would resume on a different floor with a dryer printer, rather than doing the work I was tasked with.

Much of the time was spent setting up addresses on the dry equipment & running around in patching network closets to see what was working.

I personally was already on W2K but I could have taken a whole bag or three out the front door or salvaged them from the car park skip out of hours later as 98SE was still current.

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