Re: Prison is to harsh but...
Unfortunately testimony was a pack of lies:
How Microsoft helped imprison a man for ‘counterfeiting’ software it gives away for free
What Microsoft alleged, when it became clear that the data on the discs was worth precisely nothing without a license key, as evidenced by its own free distribution thereof, was that the discs Lundgren was selling were intended to short-circuit its official refurbishment program.
That’s the official registered refurbisher program where a company might buy old laptops, wipe them and contact Microsoft saying “Hey, give us 12 Windows 7 Home licenses,” which are then provided for a deep discount — $20-40 each, down from the full retail price of hundreds. It encourages reuse of perfectly good hardware and keeps costs down, both of which are solid goals.
Every disc Lundgren sold to refurbishers, Microsoft argued, caused $20-40 (times .75, the profit ratio) of lost OS sales because it would be used in place of the official licensing process. A simplified version of this ($25 times 28,000 units) was the basis for the $700,000 figure used in part to determine the severity of his crime and sentence.
There are several things wrong with this assertion:
Lundgren was not necessarily selling these discs to refurbishers for use in refurbishing computers — the discs would be perfectly useful to any Dell owner who walked in and wanted a recovery disc for their own purposes. The government case rests on an assumption that was not demonstrated by any testimony or evidence.
The discs are not what Microsoft charges for. As already established, the disc and the data on it are provided for free. Anyone could download a copy and make their own, including refurbishers. Microsoft charges for a license to activate the software on the disc. The discs themselves are just an easy way to move data around. There’s no reason why refurbishers would not buy discs from Lundgren and order licenses from Microsoft.
Dell computers (and most computers from dealers) come with a Certificate of Authenticity with a corresponding Windows product key. So if intentions are to be considered, fundamentally these discs were intended for sale to and use by authorized, licensed users of the OS.
Furthermore, since many computers come with COAs, if the refurbishers decide to skip getting a new license use a given computer’s COA, that is not the fault of Lundgren, and could easily be accomplished with the free software Microsoft itself provides.
That process — using the COA instead of buying a new license — is not permitted by Microsoft and is murky copyright-wise. But in this case the defendants say it was admitted by U.S. prosecutors that the COA “belongs” to the hardware, not the first buyer. The alternative is that, for example, if I sold a computer to a friend with Windows installed, he would be required to buy a new copy of Windows to install over the first, which is absurd.
Naturally no actual damage was actually done. The damage is entirely theoretical and incorrect at that. A copy of Windows cannot be sold because it is freely provided; only a license key can be sold, and those sales are what Microsoft alleges were affected — but Lundgren neither had nor sold any license keys.