Man Jailed for Copying Windows Restore Disks

John Lister's picture

A man behind an scheme to sell Windows restore disks for 25 cents will pay a $50,000 fine and spend 15 months in prison. Eric Lundgren offered the disks as part of his e-waste recycling business.

Lundgren originally operated a perfectly legitimate business; at the time, he lived in China and bought cheap computer components. He'd then ship the components to the US where they'd be used to repair computers. One major selling point of the business was that people could use their computers longer and even upgrade certain components, rather than sending them to a landfill.

In 2012 Lundgren added a new product to his line, namely Windows restore disks. These are disks given free of charge to people who buy a Windows computer, though they can also be downloaded by people who have a legal copy of Windows. The idea is that users can then reinstall Windows if there's a problem with their computer, such as a hard drive failing or being made useless by a virus.

It's questionable at best whether these disks can legally be sold on to somebody else. In any case, that was irrelevant because Lungdren did not acquire the disks - instead, he made 28,000 copies of the disk. He then shipped them to a contact in Florida.

Disks Seized At Border

US customs officials seized the discs at a border check and then found the contact, who agreed to make a plea bargain. He had agreed to buy the discs for $3,400 (just over 12 cents each) with the plan of selling them to computer dealers for 25 cents each.

While it would have been perfectly legal for end users to have used the discs (as they would only work with a valid Windows license key), it was illegal to copy and sell the discs in this way. The offense was made worse by Lungdren using Windows and Dell logos on the counterfeit disc labels. (Source: gizmodo.com)

Lundgren plead guilty to charges of criminal copyright infringement and conspiracy to traffic in counterfeit goods. However, he disputed the value prosecutors placed on the disks, which was a significant point as it affected the penalties the court could impose.

Court Says Discs Worth $25 a Piece

Prosecutors said the disks were worth $299 each based on the cost of buying the relevant editions of Windows, a figure that appears to have come from the full (rather than update) Professional editions of the versions of Windows available at the time. In contrast Lungdren and an expert witness argued that they had no commercial value as Microsoft gave them away free of charge.

The court instead settled on a figure of $25 per disc, based on the fee Microsoft charges legitimate computer refurbishing companies to get a copy. That made the total value of the counterfeiting $700,000, which was key to the sentence Lungdren received. He appealed the verdict and penalties, but that appeal has now been rejected. (Source: washingtonpost.com)

What's Your Opinion?

Was the sentence fair given the circumstances of the case? Should Microsoft charge anything for the restore discs other than the physical cost of producing and distributing them? Do you think Lungdren did anything wrong?

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Comments

Dennis Faas's picture

I am not sure why he would go through the hassle of making 28,000 copies of a single disc and then ship it to the USA where it could be intercepted by border agents! It would have been FAR safer to make an .ISO image of the disc in China (or wherever he was at the time), then upload the digital contents using a VPN (where it could not have been intercepted), then hire a firm to burn the discs and create the labels in the USA. Of course this would not be as cost effective and certainly just as illegal, but you get the idea. He deserves to go to jail for having such careless judgement.

ifpusr's picture

LOL!!!! :D

Very unfortunate. I feel very sorry for this guy who it seems only wanted to be sure of recouping the cost of reproducing the software. The $25 Microsoft charges would otherwise of course be passed directly on to impoverished people who would be Lundgren's customer base. That is very poor behaviour on Microsoft's part, considering also that Lundgren is doing the planet and therefore by extension all of us who sail in her a favour by recycling and putting to excellent use old computer bits that would otherwise end up in landfill.

artmcteagle_10929's picture

I feel this penalty is overly harsh and very vindictive. He did act stupidly, however the overlarge fine itself would've sufficed. I'm sure that his life has been ruined now, because of a gross error of judgement.
The hypocrisy of these giant corporations is beyond belief. The mendacity and the shenanigans they are constantly involved is never ending, e.g. Facebook etc. Tax avoidance on a grandiose scale is also carried out, literally robbing countries. Apple was fined to the tune of a couple of billion by the EU for tax avoidance.
People are waking up to the fact that they're a bunch of rotters.