How Microsoft helped imprison a man for counterfeiting software it gives away for free

https://techcrunch.com/2018/04/25/how-microsoft-helped-imprison-a-man-for-counterfeiting-software-it-gives-away-for-free/

Wondering if he hadn't made these disks look like Dell's this would have made it to court.

I would guess he's either really annoyed someone or the DMCA supporters want a scalp.

He's organised, at his own cost, for 1000's of reinstallation DVDs for Windows 7 to be produced, in doing so he's had them made to look identical to the Dell DVDs that are shipped free when you buy a new computer.

This is where it gets messy legally.

Reinstall DVDs from manufacturers just contain software. They are provided "free" with a new PC.
(Actually there's a nominal cost to the PC manufacturer in manufacturing them but it works out at pennies - the convicted guy was creating these and his costs would have been a little higher as he was making 1000's while PC manufacturers make 1,000,000's). They have printed on them "Please do not make copies of this disk".

Windows software requires a license to use. When you buy your PC with Windows from Dell, Dell have bought a Windows license from Microsoft and are selling it on to you. The cost - around $20 compared to $140 for the full retail version.

The short version of the court case is two-fold - (1) Microsoft say they've lost out on 1,000's of $20 licenses AND (2) because the disks look identical to Dell's originals they are counterfeit.

The counterfeit argument wasn't contested, if he'd just labelled them "Here's a Free Reinstallation DVD for Windows 7" instead there would be no counterfeiting case to answer.

But once that was agreed then Microsoft (although more likely the DMCA guys) conflated that with the software being counterfeit too and depriving Microsoft of revenue. They also implied that the disks could contain a selection of nasty viruses and spyware that had been added although they were tested and found to be identical to the Dell originals.

However if you only took one of these disks to reinstall Windows on a system that you had already paid Microsoft/Dell $20 when you bought it there would be no additional license payment - maybe just the admin cost for Dell to ship it to you - but NOT a license cost.

There is a secondary argument that if a PC gets recycled (refurbished) it needs to be relicenced by Microsoft as they don't let the original owner transfer their license and because that's the business the guy is in (recycling PC's to prevent them ending up in landfill) those disks could be used to reinstall Windows.

But that doesn't create a license it just installs the software and the guy is a licensed refurbisher so he's already paying Microsoft the refurb license fees!!

So who is losing out here? Does that loss equate to the sentence?
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