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(PennLive)   Microsoft to sue mom-and-pop computer store over copyright and trademark infringement over unauthorized copies of Microsoft's Windows XP software in refurbished computers. In other news, Microsoft still cares about Windows XP   (pennlive.com) divider line 86
    More: Interesting, Windows XP, Microsoft, trademark infringement, computers, software components  
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2109 clicks; posted to Business » on 04 Sep 2013 at 1:06 PM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-09-04 10:46:17 AM  
Look, it doesn't matter how small your company is, you cannot install the same license of Windows XP on every computer you sell.
 
2013-09-04 12:05:22 PM  
Four months later, however, the firm sold a computer equipped with an unauthorized copy of Windows XP to an investigator who was working for Microsoft, the suit states. "This is not an isolated incident," Microsoft claims in its complaint.

Microsoft contends that only a detailed accounting of The Computer Barn's sales could uncover the scope of the alleged fraud and the amount of the financial loss to Microsoft. Microsoft claims money can't really compensate for the alleged damage to its business and reputation, however.

In July, Microsoft, which has been involved in many trademark infringement cases as both a plaintiff and a defendant in the U.S. and overseas, reported that its revenue during the prior 12 months totaled nearly $78 billion.


Microsoft doesn't need to $5k in revenue this company bilked them for. But they little company that could get into bed with them, couldn't follow their rules. Sucks for everyone.

Should have gone with Linux.
 
2013-09-04 12:08:23 PM  

Nadie_AZ: Four months later, however, the firm sold a computer equipped with an unauthorized copy of Windows XP to an investigator who was working for Microsoft, the suit states. "This is not an isolated incident," Microsoft claims in its complaint.

Microsoft contends that only a detailed accounting of The Computer Barn's sales could uncover the scope of the alleged fraud and the amount of the financial loss to Microsoft. Microsoft claims money can't really compensate for the alleged damage to its business and reputation, however.

In July, Microsoft, which has been involved in many trademark infringement cases as both a plaintiff and a defendant in the U.S. and overseas, reported that its revenue during the prior 12 months totaled nearly $78 billion.

Microsoft doesn't need to $5k in revenue this company bilked them for. But they little company that could get into bed with them, couldn't follow their rules. Sucks for everyone.

Should have gone with Linux.


It's unlikely that MS really cares about this particular case in terms of revenue lost, but they need to defend their trademarks and licenses in court or else it sets precedent where other companies operating on a scale that MS would care about in terms of revenue may do the same, and try to use this case as justification.

The lawyer fees will cost MS more than anything they'll get out of this, but they have to do it so that others don't do the same thing.
 
2013-09-04 12:19:33 PM  
Mom and Pop sound like crooks.
 
2013-09-04 12:21:03 PM  
If I had to guess this company was refurbing Vista machines and installing XP.  That is a no no.
 
2013-09-04 12:41:53 PM  
The "mom-and-pop" shield defense gets thrown around way too much, especially when the lawyers retained by large companies have the audacity to do their job.

The "mom-and-pop" here was engaged in piracy.   Upgrading your computer is not a dastardly plan by evil Micro$oft to sell more computers, it is the cost of running a business.  If your business cannot absorb the cost of a new computer every 8 years, fold it, it's not profitable.
 
2013-09-04 01:16:16 PM  

Lsherm: Look, it doesn't matter how small your company is, you cannot install the same license of Windows XP on every computer you sell.


Especially since part of the whole purpose of being a certified "refurbisher" is that you're supposedly a trustworthy source of legitimate software. Can't exactly let somebody run around using your branding to advertise that they're legit while they're installing the same copy of Windows on ten different machines at a time.
 
2013-09-04 01:16:17 PM  
Yep, Mom and Pop were farking idiots.  Buy your licenses and follow the rules.
 
2013-09-04 01:19:56 PM  
Dumbasses. Buy the f*ckin licenses fer gods' sakes.
 
2013-09-04 01:21:12 PM  
yeah, fark those guys.  windows xp isn't freaking free.

/it should be
 
2013-09-04 01:27:23 PM  

Lsherm: Look, it doesn't matter how small your company is, you cannot install the same license of Windows XP on every computer you sell.


Yup.

Back in 1988 I operated a computer services business that I ran with another Marine (this was a "second job" sort of thing) and two Radio Shack employees down in Beaufort, SC - the self-proclaimed "Computer Guy" store in town was selling shareware with GW-BASIC on the disc. One of my partners dropped a dime on him (Personally, I didn't care), and the BSA sent him a nastygram, so the guy stopped offering Shareware discs (I think he was also giving pirated copies of MS-DOS with his computers, too, though).

It doesn't matter how small the business or the amount of real damages - businesses have to defend this blatant piracy, particularly when it is commercially benefiting another party.
 
2013-09-04 01:28:57 PM  

LesserEvil: Lsherm: Look, it doesn't matter how small your company is, you cannot install the same license of Windows XP on every computer you sell.

Yup.

Back in 1988 I operated a computer services business that I ran with another Marine (this was a "second job" sort of thing) and two Radio Shack employees down in Beaufort, SC - the self-proclaimed "Computer Guy" store in town was selling shareware with GW-BASIC on the disc. One of my partners dropped a dime on him (Personally, I didn't care), and the BSA sent him a nastygram, so the guy stopped offering Shareware discs (I think he was also giving pirated copies of MS-DOS with his computers, too, though).

It doesn't matter how small the business or the amount of real damages - businesses have to defend against this blatant piracy, particularly when it is commercially benefiting another party.


FTFM
 
2013-09-04 01:48:25 PM  

Tom_Slick: If I had to guess this company was refurbing Vista machines and installing XP.  That is a no no.


Etchy333: The "mom-and-pop" here was engaged in piracy.


frepnog: yeah, fark those guys.  windows xp isn't freaking free.


I think something slightly more complicated might have been going on here. Technically, it's illegal for a refurbisher to resell a computer with an existing Windows installation to a new customer (it violates the original Windows license), unless a few specific criteria are met.  My guess is that they were getting old computers, upgrading some components, and then reselling them without purchasing a new Windows license.

Microsoft also doesn't give out new licenses for Windows XP, so it's possible they felt it wasn't fair to not offer that software anymore.

This isn't to say that what they did was right, just that it's probably not blatant piracy. They're probably either not aware of the licensing obligations for refurbished computers, or they're not happy that Windows XP is no longer offered.
 
2013-09-04 01:51:59 PM  
Small "mom-and-pop" computer shops and all those people selling refurbished computers at flea markets and on Craigslist are probably some of the biggest pirates of Windows in the(though they've still got nothing on Asia).
 
2013-09-04 01:54:12 PM  

Fubini: This isn't to say that what they did was right, just that it's probably not blatant piracy. They're probably either not aware of the licensing obligations for refurbished computers, or they're not happy that Windows XP is no longer offered.


or installing a vlk version on every machine.
 
2013-09-04 01:59:05 PM  

Fubini: This isn't to say that what they did was right, just that it's probably not blatant piracy. They're probably either not aware of the licensing obligations for refurbished computers, or they're not happy that Windows XP is no longer offered.


FTA:
Washington-based Microsoft is claiming that The Computer Barn has been installing "infringing" copies of its software even though Microsoft sent the firm a letter in January 2005 asking that it "stop the distribution of unauthorized Microsoft software components."
In late 2012, The Computer Barn joined the Microsoft Registered Refurbisher Program and was given information on how to distribute refurbished computers equipped with licensed Microsoft software.
Four months later, however, the firm sold a computer equipped with an unauthorized copy of Windows XP to an investigator who was working for Microsoft, the suit states. "This is not an isolated incident," Microsoft claims in its complaint.


I don't think they can really use the "gosh, we didn't know what our obligations were!" defense.
 
2013-09-04 02:05:34 PM  

Theaetetus: I don't think they can really use the "gosh, we didn't know what our obligations were!" defense.


Surely not. All I'm saying is that they're probably not just thinking "F**K Micro$oft"

Software licenses are funny and non-intuitive things. It doesn't necessarily make sense to people that they can't buy and fix up computers like they can buy fix up used cars.
 
2013-09-04 02:11:39 PM  

Fubini: Theaetetus: I don't think they can really use the "gosh, we didn't know what our obligations were!" defense.

Surely not. All I'm saying is that they're probably not just thinking "F**K Micro$oft"

Software licenses are funny and non-intuitive things. It doesn't necessarily make sense to people that they can't buy and fix up computers like they can buy fix up used cars.


Sure, in 2004, they may have thought that. Then they were corrected. At this point, it's probably more of a "pff, what are they going to do? Sue us?"
 
2013-09-04 02:13:09 PM  
The other thing not mentioned here is that by not paying for licenses, Mom and Pop are undercutting legitimate refurb or white box businesses that do follow the rules.

If had a dollar for every time I've had to bail out a local small business or Not For Profit that bought a cheap refurb or white box PC only to discover that they couldn't activate the license or download MSFT upgrades, I'd have $17.50
 
2013-09-04 02:17:53 PM  
Fark your mom.

/And pop, but I'll leave that to someone else.
 
2013-09-04 02:20:14 PM  
How is there any money in this?

I bought a Core 2 duo 'refurbed' system for $219 with Windows 7 professional on it recently from a store in the 'authorized refurb' business.   Just a copy of Windows 7 OEM professional is $139 at Newegg.
Between the original cost, paying some kid $7.25/hour to image it, put it in a box, and stick it on a shelf they can't be making much.
 
2013-09-04 02:32:42 PM  
Who are you going to believe Aunt Mae at the Computer Barn or mean and nasty faceless MS?

Yep I thought so.
 
2013-09-04 02:40:35 PM  

Theaetetus: Sure, in 2004, they may have thought that. Then they were corrected. At this point, it's probably more of a "pff, what are they going to do? Sue us?"


Could be. Dunno. Like I said before, what they did wasn't legal (or justified), but my experience with people like this has been that licensing issues are not intuitive.

There have been numerous times in my experience when the license of a computer has been in doubt, and it always comes back to some guy whose dumb about the technicalities. I can't try and claim that I know whether they were playing dumb on purpose, or whether they just didn't educate themselves, but there it is.
 
2013-09-04 02:42:59 PM  

Fubini: Could be. Dunno. Like I said before, what they did wasn't legal (or justified), but my experience with people like this has been that licensing issues are not intuitive.


Then they shouldn't be in the business of selling refurbs until they figure it out.
 
2013-09-04 02:55:58 PM  
Vista, 7 and 8 are not suited for the dinosaur computers that shops like that sell for around $99. Even if Microsoft still sold XP for such machines, they would ask more than the intended selling price of each machine, which the shop would have to add to the price, and no one is going to pay $215.00 for a $99 dinosaur that can only do basic surfing and email.

Probably, there were license stickers on the machines, but Microsoft says those are no longer valid once the original purchaser no longer has the PC, or some such crap. Why doesn't the first sale rule apply here?

Since Microsoft doesn't even sell XP any more, that should make it's value nil.
 
2013-09-04 03:02:25 PM  
The original authentic sticker on the machine will allow the same OS as the sticker(32bit/64bit)to be reinstalled to a new owner of the refurb box.

A very interesting thing is where you use a corporate copy, which gives you a thousand machines to one key and sell refurbs with the corporate OS. That is not allowed. Especially when you crash out the whole disc and can't reinstall unless the computer shop gives you a $20 reinstall again.

Government auctions are great for getting dozens of barely used machines for pennies and then re-installing the OS that is on the authentic sticker key.

Linux mint. So free that you won't scream when you can't reinstall that virus infested Windows program
http://www.linuxmint.com/index.php

Windows 8.1 preview... Need hotmail account for confirm to something or other or just give fake hotmail.
technet.microsoft.com/en-us/windows/hh771457.aspx
 
2013-09-04 03:05:49 PM  

GoldSpider: Then they shouldn't be in the business of selling refurbs until they figure it out.


That's the tricky thing about things that aren't intuitive- you don't know that you don't know them.

I would bet money that 99% of people couldn't definitively answer these three questions without looking up a LOT of documentation:

When is it legal to sell a computer you own?

When is it legal to sell used computers commercially?

When is it legal to sell used computers that you have fixed or modified?
 
2013-09-04 03:09:44 PM  

macdaddy357: Why doesn't the first sale rule apply here?


Because you're not talking about what you think you're talking about.

The sticker on the side is an OEM license for that particular machine which was sold at a lower price to a system builder (OEM) with the stipulation that, in exchange for the lower price, it was ONLY usable on that machine. If you want a copy you can reinstall wherever you bloody well please, the retail version, at a slightly higher price, gives you that freedom provided it's only installed on one machine at a time. For example, I have a retail copy of Windows XP 64-bit that I can install on anything I want, as often as I want, so long as it's only installed on one machine at a time.

You are free to resell either one.

The key, however, is that the OEM version, the one with the little sticker, can ONLY be resold with the machine it was originally installed on. What you cannot do, for example, is take your computer somewhere, have it fundamentally changed and then reinstall the original OEM software on this new machine. That sounds like what was happening here.

That, or the group was simply reusing keys on multiple machines, which is right out, especially if you claim to be a partner.
 
2013-09-04 03:11:54 PM  

Lsherm: Look, it doesn't matter how small your company is, you cannot install the same license of Windows XP on every computer you sell.


Came here to say this.

Wholesale copyright violation for profit isn't OK just because you suck at business and your store is small.
 
2013-09-04 03:13:52 PM  
It's tough to claim lost sales infringement on a product you no longer sell or support. Microsoft could win the case but be awarded $0 in damages
 
2013-09-04 03:24:06 PM  
My mother won a free computer from a furniture store back in '01 and it had a pirated copy of ME loaded on it. No signs of authenticity and riddled with malware/viruses.
 
2013-09-04 03:26:03 PM  
Okay... if I buy a five year old corporate box that has the M$ license sticker and serial number on the side of it can I reinstall that same OS inside that box?
 
2013-09-04 03:26:42 PM  

skozlaw: What you cannot do, for example, is take your computer somewhere, have it fundamentally changed and then reinstall the original OEM software on this new machine. That sounds like what was happening here.


Technically, the only part of the computer that matters for determining that is the motherboard,  for an end user.

A commercial refurbisher has to play by slightly different rules. Microsoft says that a refurbished PC must be given a refurbishment license to be sold, and they define refurbishment as a replacement of any major components (essentially anything but the motherboard or processor(s)). Replacement of the motherboard or processor(s) requires a new license.
 
2013-09-04 03:33:56 PM  

Fubini: they define refurbishment as a replacement of any major components


However, they make an exception if the computer has both it's original COA and installation media. I should have mentioned that.
 
2013-09-04 03:38:18 PM  

wildcardjack: Okay... if I buy a five year old corporate box that has the M$ license sticker and serial number on the side of it can I reinstall that same OS inside that box?


Only if the hardware has the same specs as when it was originally purchased
 
2013-09-04 03:38:28 PM  

Fubini: Surely not. All I'm saying is that they're probably not just thinking "F**K Micro$oft"


There is a difference between infringement and willful infringement, and just because you weren't actively and knowingly violating your license doesn't mean you cant be sued for recklessly or stupidly doing so.

Also, as pointed out by T-dog up-thread, when the Might of Redmond's Legal Department sends you a nice letter explaining that what you are doing is violative of your license, you are pretty much on notice and the needle swings from good ol' infringement back over to "willful."*

/*remember kiddies, willful ignorance satisfies the "with knowledge" requirements!
 
2013-09-04 03:42:42 PM  

wildcardjack: Okay... if I buy a five year old corporate box that has the M$ license sticker and serial number on the side of it can I reinstall that same OS inside that box?


If it's OEM, yes, that license is bound to that machine forever.

If it's a volume license, no, the license is bound to the company forever.

/ well... unless they went through the process of transferring a perpetual license agreement to you, but the odds on that seem fairly slim...
 
2013-09-04 03:48:58 PM  

Lost Thought 00: It's tough to claim lost sales infringement on a product you no longer sell or support. Microsoft could win the case but be awarded $0 in damages


You should write to Microsoft and tell them that, I'm sure they'll be delighted to receive the benefit of your business insights.

In a similar vein, I'm going to set up a business selling copies of the previous-model BMW 3 Series in China, since I hear BMW isn't making those anymore. Sure, they could sue me, but since they don't make that product anymore they should be awarded $0 in damages.
 
2013-09-04 03:52:46 PM  
sell the computers without an operating system.  let the consumer install what they want.  problem solved
 
2013-09-04 03:56:28 PM  
I'm reading this from an XP machine, so I'm getting a kick out of this thread.
 
2013-09-04 03:59:46 PM  

frepnog: yeah, fark those guys.  windows xp isn't freaking free.

/it should be


It would cost Microsoft millions to let XP be free.  If they were to say XP is free, then they'd have to support it again and would be liable for millions of hacked boxes.  From a security standpoint XP sucks and no one should be using it.

Not to mention, it's getting hard to buy a machine with less than 4 GB of memory these days and XP has issues with more than 2.
 
2013-09-04 04:02:38 PM  

czetie: Lost Thought 00: It's tough to claim lost sales infringement on a product you no longer sell or support. Microsoft could win the case but be awarded $0 in damages

You should write to Microsoft and tell them that, I'm sure they'll be delighted to receive the benefit of your business insights.

In a similar vein, I'm going to set up a business selling copies of the previous-model BMW 3 Series in China, since I hear BMW isn't making those anymore. Sure, they could sue me, but since they don't make that product anymore they should be awarded $0 in damages.


So put a dollar value on the damages to Microsoft due to someone selling an illegal copy of XP in 2012
 
2013-09-04 04:06:03 PM  

ltdanman44: sell the computers without an operating system.  let the consumer install what they want.  problem solved


While installing Windows XP is technically not difficult, getting all the drivers on anything even remotely approaching modern hardware - especially if XP doesn't detect and install your NIC - can be quite challenging, Some tier-1 OEMs (coughAcercough) can't even tell end users what hardware is in their machines. It's not a very appealing option for someone looking seriously at $100 refurb machines OR for someone who might be reselling them.

I bought a used Thinkpad T410 off Ebay a few months ago that hacked Win7 Enterprise and Office 2013 preinstalled. The seller had "Microsoft Authorized" logos all over their store page, too.
 
2013-09-04 04:06:41 PM  

skozlaw: If you want a copy you can reinstall wherever you bloody well please, the retail version, at a slightly higher price, gives you that freedom provided it's only installed on one machine at a time.


A "slightly" higher price... for example:
Windows 7 Professional OEM - $155
Windows 7 Professional Retail - $268
 
2013-09-04 04:06:45 PM  

Mr. Eugenides: frepnog: yeah, fark those guys.  windows xp isn't freaking free.

/it should be

It would cost Microsoft millions to let XP be free.  If they were to say XP is free, then they'd have to support it again and would be liable for millions of hacked boxes.  From a security standpoint XP sucks and no one should be using it.

Not to mention, it's getting hard to buy a machine with less than 4 GB of memory these days and XP has issues with more than 2.


Why?
 
2013-09-04 04:06:46 PM  

Lost Thought 00: So put a dollar value on the damages to Microsoft due to someone selling an illegal copy of XP in 2012


easy:

17 U.S.C. § 504


(1) [T]he copyright owner may elect, at any time before final judgment is rendered, to recover, instead of actual damages and profits, an award of statutory damages for all infringements involved in the action . . .  in a sum of not less than $750 or more than $30,000 as the court considers just. For the purposes of this subsection, all the parts of a compilation or derivative work constitute one work.

(2) In a case where the copyright owner sustains the burden of proving, and the court finds, that infringement was committed willfully, the court in its discretion may increase the award of statutory damages to a sum of not more than $150,000.
 
2013-09-04 04:07:23 PM  
So if these are refurbished what happened to the original copy of XP?

Far as I'm concerned once I buy something I have a the right to it forever.. that includes using software that is on a now defunct computer in another device.

Same with music..  if I bought the cd I will rip it off the internet as needed for my own use.
 
2013-09-04 04:08:37 PM  

mrlewish: Far as I'm concerned once I buy something I have a the right to it forever.. that includes using software that is on a now defunct computer in another device.


Which is cool.  Alas, the United States disagrees with you.
 
2013-09-04 04:17:21 PM  

Ivo Shandor: A "slightly" higher price... for example:


Actually, if you use it as intended, it's a lower price. Even if you only ever replace the machine once it's $134/install versus $155/install for OEM. And if you're one of those people who's upgrading or replacing a gaming rig every 2 years or so it's MUCH cheaper.

/ assuming you follow the rules anyway since there's very little other than your conscience stopping you from reusing the OEM installer in most cases
 
2013-09-04 04:17:36 PM  

mrlewish: Far as I'm concerned once I buy something I have a the right to it forever.. that includes using software that is on a now defunct computer in another device.


You didn't buy the software. You bought a limited license to use it under certain conditions. Would you also expect that you could buy one movie ticket and then go back to that theatre every night?

Don't like it? Then use only free software or pressure your legislators to fix the laws.
 
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