It might be helpful to manufacture a bunch of these recovery discs and offer them to repair shops to help people who were unable to download the recovery discs themselves. He was being helpful.

I know this for a fact that upon downloading any software, only you hold have the rights to the software and nobody else. If you choose to offer this software to a third party, well then you have been put on legal notice. In this case, the person who downloaded the recovery disc should not have offered any of that software to a third party at all. That's where he screwed up. He could have kept the recovery software himself but to share it with somebody else becomes a totally different matter.

I recall ~12 years back that Microsoft was issuing its service updates for WinXP. But some people didn't want to download them from Microsoft. So someone set up their own big Windows Update website that worked just as well as Microsoft's. Microsoft was not amused at all and within a few years they got it shut down.

Of course, it does suck. But just because the guy was doing this to "save the planet" and to help people re-use old computers doesn't mean that it is automatically legal.

Of course, having just typed that, I still hate Microsoft about as much as ever. But this action is consistent with their behavior over many years. It isn't anything new.

Of course, it does suck. But just because the guy was doing this to "save the planet" and to help people re-use old computers doesn't mean that it is automatically legal.

Slavery was legal, and fortunately at that time, there were people who wanted to "save the planet".

The key problem is that modern capitalism is reaching its limits. As a result the owning class is searching for the rent - to extract the wealth from rent on property (including intellectual one).

That is why the patents were extended retroactively into the remote past. That is why Monsanto tries to destroy traditional plants and to "own" entire food supply of the Earth. Etc, etc ...

All this when the property and rent is getting concentrated in the hands of a shrinking group of people. It won't last.

It is becoming more urgent for them as AI advances will make the present organization of production of goods and services obsolete. They will cling to their titles, logos, shields and patents like old landed aristocracy. They might be ready to set planet on fire to keep things as there were before.

But this action is consistent with their behavior over many years. It isn't anything new.

But the courts do not have to give them the win. They CHOOSE to. And that's where the blame lies - not in Microsoft's trying, but in the Courts' deciding to validate their overreach.

But the courts do not have to give them the win. They CHOOSE to. And that's where the blame lies - not in Microsoft's trying, but in the Courts' deciding to validate their overreach.

I don't want to defend Microsoft at all.

And the courts have little choice actually. This area of law is pretty established.

These were primarily Dell restore disks. They were licensed to Dell to include bundled with machines and Microsoft got paid only about $10 a copy for the Home version of Windows. Dell was responsible for making the disks and supplying them as backup disks for new Dell Windows machines. For a long time, they included them for free. Then they started charging $5 then $10 for a copy. Then they moved to a system where you could burn your own DVD-R or CD-R if you wanted to.

But Microsoft only licensed Dell to do it or, downstream in the legal sense, for Dell to allow users to burn their own copy but only for personal use. And nothing else at all.

Microsoft is in the clear legally, from any angle. I'd say it isn't worth the hit they are taking in this case but I do understand why they are doing it. And if I were them, I would probably do the same thing.

A big corporation sometimes has to protect its legal interests in court against infringers (even "good guys") because if they don't, they'll find they can't enforce anything in those contracts. And you know it makes a big difference. Look at that old Jello trademark case. Or, as we have to say now, Jell-o™. Lost their original trademark due to failing to enforce their original trademark in a timely fashion, thereby allowing Jello to become a generic product name and not a legally protected trademark.

Microsoft has legal reasons why it is doing this and taking the hit in public opinion of them. And if you were their lawyer, you'd probably advise them to do the exact same thing.

the person who downloaded the recovery disc should not have offered any of that software to a third party at all. That's where he screwed up.

In Dicktards world, nobody can screw up but evil government.

It may be that he will spend time in prison just to strengthen Microsoft's legal strategy and give them a strong court precedent to threaten people with.

Hopefully it will have a market impact of pushing people to Linux.

When all else fails, read what the court actually wrote.

Case: 17-12466 Date Filed: 04/11/2018 Page: 1 of 8

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT

No. 17-12466 Non-Argument Calendar
D.C. Docket No. 9:16-cr-80090-DTKH-2

UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
CLIFFORD ERIC LUNDGREN,
Defendant-Appellant.

Appeal from the United States District Court for the Southern District of Florida
(April 11, 2018)

Before WILLIAM PRYOR, MARTIN, and ANDERSON, Circuit Judges. PER CURIAM:

Case: 17-12466 Date Filed: 04/11/2018 Page: 2 of 8

Clifford Lundgren pled guilty to conspiring to traffic in counterfeit goods, in violation of 18 U.S.C. § 2320(a)(1), and criminal copyright infringement, in violation of 17 U.S.C. § 506(a)(1)(A) and 18 U.S.C. § 2319(a) and (b)(1). Lundgren's plea related to his role in a scheme in which he created and intended to sell about 28,000 copies of Dell reinstallation discs for Microsoft Windows, without permission from Microsoft. Lundgren appeals his sentence of 15-months imprisonment. He argues the district court erred in calculating the value of the infringed item, which drove his guideline range, and that his sentence is substantively unreasonable as a result. After careful review, we affirm.

I.

Robert Wolff, a codefendant, contacted Lundgren to inquire about creating unauthorized copies of Dell reinstallation CDs for Microsoft Windows that could be sold to refurbishers of Dell computers. Wolff provided Lundgren an authorized retail copy of a disc he had purchased, and Lundgren arranged for the disc to be copied by a Chinese manufacturer. The copied discs had labels on them that falsely said the discs contained authorized copies of copyrighted software.

In 2012, U.S. Customs and Border Protection officers detained several shipments of discs that Lundgren had shipped to Wolff from China. In 2016, Lundgren and Wolff were charged by indictment with conspiracy to traffic in counterfeit goods, trafficking in counterfeit goods, criminal copyright

2

Case: 17-12466 Date Filed: 04/11/2018 Page: 3 of 8

infringement, trafficking in illicit labels, wire fraud, and mail fraud. Lundgren entered into a plea agreement in which he pled guilty to conspiracy to traffic in counterfeit goods and criminal copyright infringement. The government dropped the remaining charges. Lundgren admitted he shipped approximately 28,000 counterfeit discs to Wolff, and that on one occasion, Wolff paid Lundgren $3,400 in exchange for discs.

A probation officer prepared a Presentence Investigation Report ("PSR"), which calculated Lundgren's guideline sentencing range to be 37 to 46 months imprisonment. This range was largely based on a calculation that valued the infringed goods at $700,000. To arrive at this amount, the PSR relied on evidence put forward by the government that "Microsoft had a certified computer refurbisher program that made genuine authorized reinstallation discs available to computer refurbishers for about $25," and multiplying that amount by the 28,000 discs produced.

Lundgren objected to the PSR infringement amount. He argued that the Sentencing Guidelines required the court to use an infringement amount of about $4 per disk, which was the price for which Lundgren and Wolff were selling their copies. Lundgren also argued that the $25 retail price was inappropriate because the copied disks were not exact reproductions of the original.

3

Case: 17-12466 Date Filed: 04/11/2018 Page: 4 of 8

At sentencing, the court heard expert testimony on the appropriate value to use for the infringement amount. The government presented evidence that Original Equipment Manufacturers ("OEM") like Dell enter into licensing agreements with Microsoft such that each Dell device has a Microsoft operating system license that travels with the device in perpetuity. As part of that agreement, OEMs provide reinstallation discs so that users can reinstall the software if for some reason it is deleted from their devices.

Refurbishers often purchase computers that have been wiped clean from businesses. If those computers came from an OEM like Dell, they would have been set up with a perpetual license to a Microsoft operating system. However, because the devices are typically wiped clean and usually do not come with their original reinstallation discs, the device would not have a copy of the Microsoft operating system software. Microsoft offers discounted software to licensed refurbishers who find themselves in this situation. The government introduced evidence that while a person could have purchased Windows XP Pro from a retail store for $299, small registered refurbishers could have purchased the software for $25. The government's expert also testified that even if a user did not have a legitimate license, a reinstallation disc could allow a user to access Microsoft operating system software with near-full functionality.

4

Case: 17-12466 Date Filed: 04/11/2018 Page: 5 of 8

Lundgren presented testimony that disputed the value of the reinstallation discs. Lundgren's expert testified that reinstallation discs were fundamentally different than the discs sold by Microsoft to small registered refurbishers because the discs sold by Microsoft came with a license, and a reinstallation disc required the user to obtain a license from somewhere else. The defense expert testified that the value of the discs without a license was "[z]ero or near zero."

The sentencing judge determined that the appropriate infringement value was the value of the infringed discs to small registered refurbishers: $25. The court found credible the government expert's testimony that he was able to use the infringing discs to install functioning Microsoft software. In contrast, the court found the defense expert's testimony that the discs were worth nothing without the license to be not credible. In particular, the court noted that it did not find it reasonable to believe that Lundgren and his codefendant had spent at least around $80,000 to create discs that had no value. Using the $25 infringement amount, Lundgren's guideline range was 37 to 46 months imprisonment. The court sentenced Lundgren to 15-months imprisonment. This appeal followed.

II.

"We review the district court's factual findings for clear error and the application of the Sentencing Guidelines de novo." United States v. Lozano, 490 F.3d 1317, 1321 (11th Cir. 2007). In particular, we review for clear error a district

5

Case: 17-12466 Date Filed: 04/11/2018 Page: 6 of 8

court's calculation of the relevant infringement amount. Id. at 1322. We afford substantial deference to a district court's credibility determinations at sentencing. United States v. Pham, 463 F.3d 1239, 1244 (11th Cir. 2006) (per curiam). "We review the reasonableness of a sentence for an abuse of discretion." United States v. Victor, 719 F.3d 1288, 1291 (11th Cir. 2013).

III.

A defendant convicted of conspiracy to traffic in counterfeit goods is sentenced based in part on his "infringement amount." USSG § 2B5.3(b)(1). If the case involves an infringing item that "is, or appears to a reasonably informed purchaser to be, identical or substantially equivalent to an infringed item," courts are instructed to calculate the infringement amount by taking "the retail value of the infringed item, multiplied by the number of infringing items." Id. § 2B5.3 cmt. n.2(A)(i) (emphasis added). As relevant here, if the infringing item is not substantially equivalent to the infringed item, the infringement amount is instead based on "the retail value of the infringing item." Id. § 2B5.3 cmt. n.2(B) (emphasis added).

Lundgren argues that the district court erred in calculating the infringement value because the amount offered by the government was not for a substantially identical item. Specifically, Lundgren says the $25 amount offered by the

6

Case: 17-12466 Date Filed: 04/11/2018 Page: 7 of 8

government was for Microsoft software with a license, while the discs he caused to be created contained Microsoft software without a license.

The district court did not err in concluding the "infringement amount" in this case was $700,000. First, the district court did not clearly err in concluding that the discs Lundgren created were, or appeared to a reasonably informed purchaser to be, substantially equivalent to legitimate discs containing Microsoft OS software. See Lozano, 490 F.3d at 1322. That conclusion was supported by the sentencing hearing testimony, in which the government's expert witness testified that the software on the disks created by Lundgren performed in a manner largely indistinguishable from the genuine versions created by Microsoft. While experts on both sides may have identified differences in functionality in the discs, the district court did not clearly err in finding them substantially equivalent.

Second, the district court reasonably concluded that the proper value of the infringed item was $25 per disc. The government's expert testified that the lowest amount Microsoft charges buyers in the relevant market—the small registered computer refurbisher market—was $25 per disc. Although the defense expert testified that discs containing the relevant Microsoft OS software had little or no value when unaccompanied by a product key or license, the district court explicitly stated that it did not find that testimony to be credible. We afford deference to a district court's credibility determinations, and here, no evidence suggests that the

7

Case: 17-12466 Date Filed: 04/11/2018 Page: 8 of 8

district court erred in concluding that the defense expert's valuation was not worthy of credence. Pham, 463 F.3d at 1244. To the contrary, as the district court noted, it is difficult to square the defense's valuation with the fact that Lundgren and his codefendant spent about $80,000 to fund a copyright-infringement scheme that they expected to profit from.

In sum, the district court did not clearly err in valuing the infringed item at $25 per unit and concluding that the total infringement amount was $700,000. As a result, the district court correctly determined that Lundgren's base offense was subject to a 14-level increase under § 2B5.3(b)(1) and § 2B1.1(b)(1)(H), and correctly calculated Lundgren's guideline range. Because Lundgren's only argument that his sentence was unreasonable is rooted in this purported miscalculation, we also conclude that his below-guideline sentence was procedurally and substantively reasonable. See Gall v. United States, 552 U.S. 38, 51, 128 S. Ct. 586, 597 (2007). We therefore affirm his total sentence.

AFFIRMED.

8

https://arstechnica.com/tech-policy/2018/04/why-the-man-who-tried-to-sell-windows-recovery-discs-will-go-to-prison/?comments=1&post=35225021

Hard discs, hard time —

Why the man who tried to sell Windows recovery discs will go to prison

Eric Lundgren paid a company in China to print thousands of Dell-branded recovery CDs.

Cyrus Farivar - 4/26/2018, 7:41 AM

A California man has been ordered to prison for 15 months after having been convicted of "counterfeiting" thousands of Windows Reinstallation Discs. Curiously, Microsoft routinely gives away this Windows download at no cost.

In short, Eric Lundgren, who runs a 100-employee Los Angeles-area e-waste company known as IT Asset Partners, was sentenced to prison for selling something that is otherwise generally free.

On Wednesday, a federal appeals court affirmed Lundgren’s sentence, as he had pleaded guilty in 2017 to criminal copyright infringement in connection to his unauthorized sale of the discs.

According to Lundgren’s attorneys, however, a district court in Florida—and by extension, the 11th US Circuit Court of Appeals—failed to appreciate the difference between selling counterfeit software and reselling bona fide software, albeit one without a license to activate it.

These discs come standard as part of the purchase of any new Windows machine. However, as computers are bought and sold and, in particular, are refurbished and sold again, sometimes those crucial discs get misplaced. Microsoft knows this and makes Windows available for download to those who need it. When someone downloads the software, the installer requires a license and product key in order to fully function.

In 2011, the electronics recycling guru obtained a Dell-authorized Windows recovery disc from a business colleague, Robert Wolff, for $5. Lundgren thought that he could simply have these CDs re-printed in China en masse—to the tune of spending $80,000 on those discs. Back then, the idea was that he would resell these Chinese-made discs to Dell refurbishers for cheap—saving them the trouble of making their own for their own customers. (If, for some reason, a Windows user with a refurbished computer can’t locate a recovery disc or a license and product key, Microsoft will sell them a new one.)

But, the discs were intercepted by US Customs and Border Protection in 2012 as they were being sent from China to Lundgren.

Wolff, however, eventually offered to buy at least some of the 28,000 discs that Lundgren hadn’t yet sold, and he paid $3,400. What Lundgren likely didn’t realize, though, was that Wolff was cooperating with federal authorities the whole time. (The government supplied that $3,400 payment.)

[snip]

And the courts have little choice actually. This area of law is pretty established.

The courts always have a choice. They can always distinguish on the facts, distinguish on the law, appeal to equity. Judges are only as bound as they decide to be.

We see this all. the. time. on political and celebrity cases. Judges have immense power to shape the law, to modify it, to interpret it, reinterpret it, decide what facts to emphasize and what facts to believe.

Judges rule America. Their decisions, currently, are considered final and unanswerable. They are politicians, but they are protected in the public mind from being viewed that way, mostly out of public ignorance of what they really are and the vast power of discretion they exercise.

These judges CHOSE to do as they did. Perhaps they did so out of simple inertia. Probably, given their age, they don't CARE about tech issues all that much, and were uninterested in creating controversy by taking a stand.

Those same judges, though, could take law that's been "settled" since the founding and throw out a President's immigration orders on new "constitutional grounds" - and then rely on the reflexive respect of Americans for the judiciary to carry their decision forward.

Consider the whole threat of contempt of Congress. It drives along political hearings. Back in the Terri Schiavo case, Congress SUBPOENAED the local Florida magistrate judge who ordered her life support cut off. The judge DISMISSED Congress' subpoena with a curt 'judges do not answer to political demands' and defied Congress. And Congress? Folded, went into recess, and did nothing to enforce their subpoena. A local magistrate in Florida told the US Republican-controlled Congress that it had no POWER to demand that he do anything, and Congress folded on the request without a hearing. (WHY? Because Congress didn't give a fuck about Terri Schiavo and were just posturing. Watch how Congress doesn't fold if somebody they subpoena about something they DO care about defies them.

My point is the judicial politicians have enormous power, and they are only limited by their lack of interest in the subject matter, the limit of their imagination, and the different opinions of stronger judges above them. That's it.

The courts have as much choice on EVERY matter as they choose to exercise.

That's why corrupt town planning boards can evict private residents from their homes to hand the homes over to private companies who have given campaign contributions and other economic blandishments to the local government. Because 5 judges say so.

That's why a woman can killer her baby at will, in utero, because judges say so.

It's the police either are, or are not, held accountable for the same crimes, on a case by case basis: the whims of the judges.

They always JUSTIFY their decisions on some fact, some law, but that merely demonstrates that judges are the masters of PRETEXT. They're not bound, but they always TALK as though they are, as though their opinions are the inevitable, natural and irresistible requirement of the law.

Well, none of their decisions are.

Here, I think inertia was fine for them, because they didn't care.

Hopefully it will have a market impact of pushing people to Linux.

You should hold your breath, waiting for the final triumph of Linux over Windows.

It seems to me that that goal is farther than ever from reality. Consumers just don't like Linux. Paste all the themes and features you want on it and they still don't want it.

I'd prefer if you could get the Windows people to switch (to anything but Windows). But they are creatures of habit, as we all are.

Here, I think inertia was fine for them, because they didn't care. d

There have been problems before caused directly by unauthorized update disks.

Microsoft won this case on the merits. And just because the judges weren't a bunch of techies doesn't mean they were wrong.

I dislike this verdict but not any more than I disliked the verdict in the case of the 80yo guy who grew orchids and spent a year in prison because he grew some orchids forbidden for import in the States.

Most often, the law is just the law and judges should follow the plain wording of those laws and not seek more "just" outcomes.

In short, Eric Lundgren, who runs a 100-employee Los Angeles-area e-waste company known as IT Asset Partners, was sentenced to prison for selling something that is otherwise generally free.

Ah, this guy owns a 100-employee company. But he has to pirate Dell/Microsoft disks? He's not the tree-hugging lib he's been portrayed to be? Pshaw.

Gee, it isn't so cut and dried now, is it?

Amazing how a few facts change everything, despite some deliberately slanted screed from Deckard's usual clickbait sources.

These discs come standard as part of the purchase of any new Windows machine. However, as computers are bought and sold and, in particular, are refurbished and sold again, sometimes those crucial discs get misplaced. Microsoft knows this and makes Windows available for download to those who need it. When someone downloads the software, the installer requires a license and product key in order to fully function.

And this is true when purchasing any Windows machine software. You are supposed to be handed over the product license key to the software in order to continue operating the software. However, many computer IT companies do not furnish these to their customers upon supplying them with refurbished machines. Why do I get the feeling that there is more than just Lundgren (one party) involved?

You should hold your breath, waiting for the final triumph of Linux over Windows.

I don't expect Windows to go the way of the Dodo bird. This is about market share. And nowadays, it's getting to the point where OS's can support software from other platforms. At least Linux can run Windows programs. Certainly MS doesn't want to support Linux applications. The Linux version of Skype doesn't even run well on Linux, and perhaps that's by design as MS owns skype.

It seems to me that that goal is farther than ever from reality. Consumers just don't like Linux. Paste all the themes and features you want on it and they still don't want it.

I don't know how true that is. I think it's more true that we are creatures of habit, as you said. Certainly Windows is much more virus prone that consumers don't like.

You're back! Missed you these past few months.

Long story short, aortic valve replacement and five way bypass. I may get approved to drive again in June.

[Vicomte13] But the courts do not have to give them the win. They CHOOSE to. And that's where the blame lies - not in Microsoft's trying, but in the Courts' deciding to validate their overreach.

[tooconservative] I don't want to defend Microsoft at all.

And the courts have little choice actually. This area of law is pretty established.

The defendant pleaded GUILTY at the trial court.

Clifford Lundgren pled guilty to conspiring to traffic in counterfeit goods, in violation of 18 U.S.C. § 2320(a)(1), and criminal copyright infringement, in violation of 17 U.S.C. § 506(a)(1)(A) and 18 U.S.C. § 2319(a) and (b)(1).

11th Circuit opinion at 2.

Neither the Trial court, nor the Appellate court, were deciding guilt or innocence.

The Trial court decided on a sentence. The Appellate court ruled on defendant's appeal of the severity of the sentence.

I don't expect Windows to go the way of the Dodo bird.

They will, sooner or later. Because they are too greedy and inconsiderate.

The turning point will be when either anti-monopoly laws start to be enforced again or monopolies win and drag down the whole system into abyss of chaos, revolution and war.

The defendant pleaded GUILTY at the trial court.

Guilty pleas are proof of nothing. They are the result of prosecutorial blackmail. Nothing more, nothing less.

Guilty pleas are proof of nothing.

Yeah, and the court skips the trial phase and proceeds directly to the sentencing phase.

Pleas are proof of nothing.

They prove that coercion affects human behavior.

The defendant pleaded GUILTY at the trial court.

Under our system, that establishes guilt.

Of course, our entire legal system is unjust, depraved, quite evil and should be replaced.

Unfortunately that is not politically possible.

It will require a civil war or a foreign invasion that destroys the government completely to replace its legal system (which needs to be destroyed), and neither of those things seems to be in the cards (though I would estimate that civil war is more likely than foreign conquest; and I would expect either a government victory in a civil war, or a victory for the side that most loves the Anglo-Saxon justice system (for sentimental reasons), and either way, real reform won't happen.

Ultimately, the only real hope there is for reform in this land is space alien invasion or the second coming of Christ.

And since space aliens don't exist at all, we're left to hope for the end of the world for legal reform.

It's easier to just emigrate to a place with better laws. Unfortunately the freest places generally have crappy health care, and an American emigre really can't get work in the local economy, so only Americans who have accumulated some wealth can manage it.

And almost the only Americans with enough accumulated wealth to manage it are old and need health care. And that's here, so they stay.

You are a silly person.

Why do you hate trial by jury?

I don't hate the concept. The way we administer it drains the justice out of it