Eric Lundgren built a pretty successful business out of recycling electronic waste, a passion of his that at one point brought him to Ghana at the behest of the country's vice president to help clean up discarded gadgets. He's also spent time in China doing the same thing. Now he'll spend up to 15 months in a federal prison for selling Windows restore discs.
Along with a $50,000 fine, the 15-month prison sentence was handed to Lundgren last summer, but he remained a free man while appealing the ruling. Unfortunately for him, a federal appeals court upheld the original verdict, finding that he infringed on $700,000 worth of Microsoft products, The Washington Post reports.
During his original sentencing, Senior US District Judge Daniel T.K. Hurley told Lundgren that it was a "difficult sentencing because I credit everything you are telling me, you are a very remarkable person."
What landed Lundgren in hot water was a project to manufacturer and sell thousands of Dell restore CDs for Windows PCs, for a small fee. The software is free to download by anyone who owns a Dell computer, and the software can only be used on systems with a valid Windows license.
Lundgren reasoned that many computer owners either lose or throw away their restore discs. He also suspected that many of those same owners would not feel competent enough to download the software and create their own restore disc, instead choosing to buy a new PC and throwing out their old one when something goes wrong.
Microsoft saw things a different way and decided to press charges.
"Microsoft actively supports efforts to address e-waste and has worked with responsible e-recyclers to recycle more than 11 million kilograms of e-waste since 2006. Unlike most e-recyclers, Mr. Lundgren sought out counterfeit software which he disguised as legitimate and sold to other refurbishers," Microsoft said in a statement to The Verge. "This counterfeit software exposes people who purchase recycled PCs to malware and other forms of cybercrime, which puts their security at risk and ultimately hurts the market for recycled products."
In total, Lundgren had 28,000 restore CDs made. He then shipped them to a broker in Florida with the intention of selling them for 25 cents each to computer refurbishing shops, so the shops could bundle them with used PCs.
US customs seized one of his shipments in 2012 and began investigating. Authorities convinced the Florida broker, Robert Wolff, to cooperate in a government sting operation. He called Lundgren and offered to buy the discs himself, then sent Lundgren $3,400.
Lundgren pleaded guilty to the ensuing conspiracy to traffic in counterfeit goods and criminal copyright charges, but argued the restore CDs had no value. At first, prosecutors valued the discs at $299 and claimed Lundgren had cost Microsoft $8.3 million in lost sales. That was later adjusted to $25 each, based on what Microsoft charges refurbishers for similar discs.
"I am appealing my case because Microsoft came to my sentencing and convinced the judge—without a jury—that this freely downloadable repair tool/software had the same economic value as a retail copy of Windows, which includes a Certificate of Authenticity sticker (COA) and/or a product key," Lundgren told Forbes after the original court case. "In fact, Microsoft presented to the judge only the retail value of Windows with COAs/product keys and refused to show the judge that the recovery tool/software has very little value as it can be downloaded for free."
Lundgren has accepted that he'll serve time for this, noting that appealing to the Supreme Court would be too expensive, and a long shot.
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