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Microsoft Sues Retailer for Making 94,000 Fake Windows CDs

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January 5, 2012 7:44:11 AM

what is a recovery disk?

I don't believe that ever used one, is it the thing that formats my hard drive and sets up windows and everything without installing Windows? Because if so it is one of those, and I was charged for.

If that's what this is about the what the hell's Microsoft's complaint.

If this is about them burning discs of Microsoft OSs, like the ISOs they give out when you buy digital copy of the OS burning back to her desk and giving it the people for price I also don't see what's wrong with it.

Can somebody elaborate?
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January 5, 2012 7:59:36 AM

People still buying XP and Vista hahaha
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January 5, 2012 8:00:29 AM

So I take it these 'recovery disks' are the same ones you are now prompted to make when you first turn on a pre-built computers (the disk that can restore the OS and manufacturer specific software)?

If Comet is already licensed to distribute Windows on the PCs they sale then why is it wrong for them to charge a convenience fee for producing the recovery disks (which every copy of the OS is entitled to)? Seems to me there is a big difference between producing recovery disks and selling 'fake' copies of an OS.
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January 5, 2012 8:15:04 AM

@singemagic: the user has a license to USE the installed software, and the RIGHT AS THE END USER to create one backup copy.

As it is not the end user, Comet doesn't have a right to make a copy of the software, making the DVDs an illegal copy of Windows. IF they sold a service: "creating your recovery DVDs for you", then it could work. However, if you read the MS EULA closely, especially for OEM software, you'll notice that it's so closed off that no one, except the computer's buyer and his/her immediate family, has a right to USE the software.

Now, nobody cares if a third party actually makes use of the computer... Unlee said third party makes money from that. And charging 15 bucks to burn a DVD would qualify.
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January 5, 2012 8:23:00 AM

This is the 1st plausible sue in months.
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January 5, 2012 8:37:47 AM

This all took place in one factory - it seems weird to me that comet didn't just put the blame on certain Individuals and claim they had no knowledge of it taking place.

Would love to see how this turns out.
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January 5, 2012 8:46:48 AM

Recovery Disks are useful, and just install the operating system really. I have used them several times due to hard drive failures or OS issues with my Dell machines - but those are free.

What this essentially means, is that Comet have been selling machines with OEM versions of the software and then charging customers for an upgrade to the retail version - which is a Microsoft licensed product.

There is obviously a licensing model for OEMs to provide recovery disks in place, otherwise companies like Dell wouldn't be able to bundle recovery disks with their machines.

It's quite obvious that Comet declined this option from their OEM suppliers due to cost to improve their margins, and then just created the disks themselves for free - illegally. They knew *exactly* what they were doing, especially on this scale, and have no defense for that.

If Comet were providing this service free of charge, then they would be entitled to use the 'for our customers benefit' defense. The fact that they were selling this as an optional extra removes that defense entirely. I hope that Microsoft lawyers embarass them in court.
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January 5, 2012 9:13:37 AM

Ehh Crazy world................
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January 5, 2012 9:17:17 AM

So if I get it right, retailer sold original Windows, but they included as option for the customer, to buy a recovery CD.

Imho, Microsoft's policy is unfair for the customer, because in case of hard disk failure, he can't reinstall the operating system he legally bought. . Of course Microsoft can claim that their legal agreement with comet doesn't include the option to actually sell the media, but in the end, what's the problem if the recovery prodecure is made by a CD instead of a hidden partition? I mean no one can use the CD if he doesn't have the serial number!

So, the "fake Windows CD" title, doesn't represent the truth at all. Surely it may be a agreement violation (possibly a different charge policy) but not Piracy. And Microsoft should be punished for not allowing customers to reinstall their OS on a easy way if a catastrophic disk failure occurs.

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January 5, 2012 9:17:29 AM

This boils down to the serial numbers.
It doesn't matter if you make "recovery cd" or an .iso copy.....

If they were using the same serial number over and over again in an OEM mass distro, then they are in some deep doo doo...
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January 5, 2012 11:12:05 AM

I think the problem is: the customer call Microsoft for support for the "recovery CD" and the customer think this CD is from Microsoft.

Second guess, if you make copy at large like this there is a hidden fee in the price. At the end, Comet sell probably a disk for $5 to $20 (USD) that he doesn't hold any copyright. ($5 to 20 x 94 000 = $470 000 to $1 880 000.)
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January 5, 2012 11:54:34 AM

As an OEM provider with Microsoft, Small Business Computer designers have a different set of rights for backup software than Gold OEM providers like Dell and Lenovo. Our clients need to purchase a physical copy of Windows and Office (OEM version). We cannot make an integrated backup recovery of a system for our clients.

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January 5, 2012 12:21:48 PM

if windows did not charge so damn much for their software maybe there would not be a need to counterfeit their product....how about make the software $15?....and stop limiting how many times it can be installed, i should be able to share it with my family and friends if i want to.
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January 5, 2012 12:27:10 PM

I wonder why Microsoft didn't investigate the looseness of Dell's recovery CD format. You can take any Dell recovery CD and put it into another Dell system and enter the CD key from the new system and it will install as long as its the same version of the OS. The loophole is probably the fact that there's no CD key shipped with the recovery CD and it relies on the CD key that is the same OS type therefore not a licensing issue.

If they were doing in the same format as Dell, they probably have a leg to stand on. If they were shipping with CD keys, that's another story. It will be interesting to see the outcome on this one...
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January 5, 2012 12:29:51 PM

Quote:
...company confirmed that the discs were sold to customers and sent directly to each customer after purchase.

Might be different had Comet gave the CD away. Or, just charged an outrageous fee for a "CD".
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January 5, 2012 12:56:06 PM

The issue here is that they were machine specific, if the PC has a legitimate license key on the sticker on the case then you could use a generic Windows Anytime CD and there would be no problem, just activate your machine via the license key as normal.

By providing machine specific disks which are pre-activated (I am very familiar with these disks) they are breaching lots of laws. And before all the American posters put up statements about fair-use, ligitimate copy, etc - this is the UK and the laws are different.
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January 5, 2012 1:10:57 PM

Do they sold counterfeit Windows disks or do they sold recovery Windows disks to costumers that already had purchased Windows?
Doesn't every other computer seller, sells recovery disks?
I have purchased recovery disk from several PC vendors (IBM, Lenovo, Dell, Toshiba, Acer & HP)
Some disks were just a copy of Windows XP or Vista, some other disks came with Windows and drivers and programs. None of the recovery disks I have looks like the retail Windows disks, the label on some of them look like were made with a inkjet printer.
What's wrong with selling costumers recovery disks?
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January 5, 2012 1:12:55 PM

"adversely affected by the decision to stop supplying recovery discs with each new Microsoft Operating System based computer"

WHose decision was it to NOT include recovery dvds? I'd say it would be each oem and if so then don't blame MS for not including dvds... blame Sony, Acer, Toshiba, etc.

P.s. Imagine if, for once, a company actually admitted that they'd done something wrong!
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January 5, 2012 1:37:19 PM

Quote:
The retailer said in a press release that customers had been adversely affected by Microsoft's decision to stop offering recovery discs with each new Microsoft-based computer and says it 'firmly believes' that it acted in the best interests of the customer.


Whoa! That's a good-hearted retailer!

On the larger issue though, why don't retailers just give a genuine copy of Windows, since they paid for the computer along with the OS?
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January 5, 2012 1:54:47 PM

Counterfeit recovery disks? Is there any such thing? Someone might want to remind Microsoft that what they actually sell are keys to Windows. If someone purchases a computer with an OEM Windows version on it it is theirs to use on that machine per the Microsoft license. If they want to reload it to get the crap off then it is their choice to do so. This retailer is just making it easier, not giving away copies of Windows.
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January 5, 2012 2:38:16 PM

No CDs/DVDs, no Manuals. This seems the thing to do for some time now.
It's rediculous to have a 'recovery' partition on your hard disk pre-installed.
If the HD goes so does your recovery image of course.

Seeing that it costs less than $1 to make a CD/DVD I never figured the point in doing this.
The marginal savings must be more than ofset by the extra hassle they have with unhappy customers when a recovery is needed. Just the cost of 'tech support' to walk a rookie customer thru the process of using the recovery partition alone must negate the savings right there.
Short sighted bean counters...

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January 5, 2012 3:10:29 PM

jacekringWhen you buy a computer with windows preloaded you are NOT buying a retail version of windows, you are buying a cheaper OEM version of windows. That is why you don't get a genuine copy of windows included in the box

Precisely, they would not have got in any trouble if they had simply included the generic Windows Anytime CD and let users install with that and use their product key from the sticker on the side of the box.

Using specific recovery disks is what has made them fall foul of the law, and using the defence "We acted in the best interest of customers" is poor at best because that is an admission that they did it on purpose.

I'm sure that there are plenty of things that all retailers could do in the interests of consumers that are illegal, doesn't mean they should.
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January 5, 2012 5:10:45 PM

if they didnt charge for the recovery disks, but it says they charged customer for it, your supposed to get the recovery disk free and included with your purchase. So i say microsoft has a case against them since they were in fact selling something which should be included free of charge when you buy a new pc. They dont include cds anymore because of oem manufactuar have the recovery software on the computers hard drive in a separate partion, which i usually format and delete the partion because i rather have the extra space on the hard drive.
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January 5, 2012 5:13:20 PM

maybe back in the past, but in today's current time and technology, you will rarely see a hard drive fail, you are more likely to replace the hard drive for a newer and bigger size one, i have plenty of old hard drive i dont use anymore because they are too small or too slow.
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January 5, 2012 6:24:51 PM

Doesn't really seem like a big deal to me. They were just providing a service to their customers by including a hard copy of their restore partition. They probably are in the legal wrong though and they really should have made sure that it was legal or gotten permission from the OEMs / M$ first.
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January 5, 2012 6:41:32 PM

Sued by Microsoft? That's so old-school.

These days US taxpayers are more than happy to fund the use of federal police to investigate, spend the man-hours negotiating international treaties, and passing more domestic laws so the corporations don't have to pay their own legal counsel to deal with such things.

That's how it appears from all of the government collusion with the MPAA/RIAA legal groups anyway. Microsoft just needs to jump into bed with them, where copying an MP3 would get you five years in prison, far more than manslaughter.
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January 5, 2012 7:14:10 PM

back_by_demandPrecisely, they would not have got in any trouble if they had simply included the generic Windows Anytime CD and let users install with that and use their product key from the sticker on the side of the box.Using specific recovery disks is what has made them fall foul of the law, and using the defence "We acted in the best interest of customers" is poor at best because that is an admission that they did it on purpose.I'm sure that there are plenty of things that all retailers could do in the interests of consumers that are illegal, doesn't mean they should.

They would have got in trouble with the Windows Anytime CD if they charged anything for it. Thing is they likely sold genuine OEM copies of Windows and MS is biting the hand that helps feed them. A bit wrong in my opinion, but I dont know the whole details. MS may have tried to work with them to solve the issue, but they declined. In any case, OEM versions are not just cheaper version of Windows, they carry with them no support from MS in the case of end user support. A LARGE portion of why MS sells them cheaper. End user support falls on the OEM who sold the copy and this is what the company should be charging for specifically. End user support. Where that happens that they needed to give them another CD, that is what they should or likely will be charging for. The fact they send them a CD isnt the issue. Someone has to support the OEM product sold and this is what I think Comet was likely doing. I think I would side with Comet on this one, but again dont know the whole details.
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January 5, 2012 8:12:39 PM

When you buy a copy of windows you aren't buying the OS on the disc you are buying the product key. That's where MS makes all of their money. If you lose your product key and try to buy another one from MS it cost as much as buying a Windows disc.
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January 5, 2012 10:31:02 PM

SteelCity1981When you buy a copy of windows you aren't buying the OS on the disc you are buying the product key. That's where MS makes all of their money. If you lose your product key and try to buy another one from MS it cost as much as buying a Windows disc.

You aren't just buying the key, you're buying the entire package. I have access to about 9 windows CD keys, all do not have an .iso, retail or recovery disk to go with them. Call up Microsoft and tell them you would like a CD to go with your VALID keys. They will tell you that you are SOL and will proudly point you in the direction of a retailer to purchase an entirely new copy of Windows. Point being, they don't care once that computer ships with a version of Windows. I'm seriously disappointed in the fact these recovery CD's were ever taken out. A lot of customers learn the hard way that the recovery image they need for their computer that just had a hard drive failure - was on its own partition ON the hard drive that just failed.

I applaud what Comet was attempting to do for their customers because of this. Unfortunately, it appears they proceeded down the wrong path to accomplish this.
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January 5, 2012 10:38:35 PM

Both sides are in the wrong. First MS sells two kinds of oem licences... With or without a disc. Depending on the config, a recovery disc may not work without a bootable OS disc. Recovery discs are not reliable, and cd-r versions are almost useless. Hence, I make recovery images onto ext. hd and DVD. But I'm not making a copy of the OS disc.

Comet screwed up by selling and making the discs. They could make a boot cd of Linux that reinstalls from the image file... Which should be on he hard drive too. If they are selling custom notebooks and desktops, they cold spend double or triple for a legit OS disc.

Either way MS does NOT make recovery easy.
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January 5, 2012 11:40:04 PM

matt_bYou aren't just buying the key, you're buying the entire package. I have access to about 9 windows CD keys, all do not have an .iso, retail or recovery disk to go with them. Call up Microsoft and tell them you would like a CD to go with your VALID keys. They will tell you that you are SOL and will proudly point you in the direction of a retailer to purchase an entirely new copy of Windows. Point being, they don't care once that computer ships with a version of Windows. I'm seriously disappointed in the fact these recovery CD's were ever taken out. A lot of customers learn the hard way that the recovery image they need for their computer that just had a hard drive failure - was on its own partition ON the hard drive that just failed. I applaud what Comet was attempting to do for their customers because of this. Unfortunately, it appears they proceeded down the wrong path to accomplish this.


I don't think you understand where i'm getting at you pay for the product key, when you buy a copy of windows, because the product key is what validates windows not the OS itself, which is why you can make as many copies of windows all you want but you can't do that with product keys and expect it to work.
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January 5, 2012 11:47:20 PM

License agreements are all BS and totally unfair to customers/repairers/manufacturers, unfortunately. If you have ever worked on a computer under manufacturers warranty you will know the complaints you get from customers when a hdd fails they have to have windows re-installed and if they cant/didn't produce a backup copy, we have to charge them to install the OS back on their for them. We also have to do this from a ghost file on a separate hard drive and cant keep CD/DVD copies of the media, which is a pain for a service company that has to request this HDD image from a manufacturer. Its all BS just to make life difficult for everyone.
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January 6, 2012 3:25:05 AM

you can order a replacement installation disk from Microsoft for about $10.
i was not aware that Microsoft offered restore disks because restore disks are usually system specific. and usually contain hardware drivers and add on software, such as Norton, AVG, free trial programs, ect.

if the company's windows cd keys were authentic, than i see no reason to bring it to court.
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Anonymous
January 6, 2012 5:02:02 AM

Best Buy offered to make me a set of Windows 7 recovery disks from my laptop when I bought it for an additional $50. Isn't that the same thing?
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January 6, 2012 11:57:33 AM

No kristie. You could have made your own for $3 of discs and 1 hr of your time. There is bit of confusion here.
Recovery discs made for your computer ( usually DVD-R discs ) are not OS discs. They contain the image from your pc as you got it new. Even goes thru the "new user EULA and 10 min setup process" etc when you do a restore. It includes all the branded crap that came with the pc.

Install disc is different. It actually copies and install the OS onto the drive, it's usually only the OS. So you'll need to do drivers after wards. An example would be a Dell installer disc, which does put the dell logo and tech support on the install, but doesnt change anything else. It's bootable and has some repair tools included. Because I work with PCs, I always keep a spare disc for Dell or HP... Life saver. As a NORMAL OEM or RETAIL installer disc won't work on dell, HP, etc. thus allowing me to install the OS for a friend or client. I've had recovery disc fail due to corruption or stupid err "this recovery is for HP only" or not work at all (like on the HP HD ) and only having the generic disc! Thus having the client spend $100 for anew disc and key!! Argh!

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January 6, 2012 12:17:03 PM

Dell has included install discs on some PCs. Comet wasn't selling a pirate ( grey area ) version to customers, but included a copy of a windows disc, but NOT a MS made OS disc. Re- reading this, I'd say this is bit of a grey area. But again, ms DOES have difFerent OEM plans. Basic types (guessing the price)

1 - $100 OEM disc, generic. People can buy from newegg, frys, campusa, tigerdirect, small pc shops.
2 - $ 35 OEM key / sticker + rights to make own installer disc to include with PC. (business Dell)
3 - $ 30 OEM key / sticker only. Up to customer to make own recovery media.
4 - $200 retail disc and key. Buyer can reinstall onto a different PC any time, but one active pc.

So, it would seem comet didn't go with option 2. Big guys go with option 3 so they don't have to inventory discs and make a bit more money. Also allows them to undercut small business such as myself as I have to pass along the $100 price of the OS to the customer... When something like Dell pays $20-30 a copy. ( corporations are not people. They don't die or make babies)

Comet screwed up... But did not pirate. A disc without a key is meaningless. A single disc can use any number of keys. But MS makes it painfully difficult for end users and smaller resellers.

Meanwhile, apple sells a retail/upgrade OS for $30 or so for 5 macs...
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Anonymous
January 6, 2012 3:50:35 PM

Good old Comet Looking after the costumers Sham other shops don't do it. All ways been good to me
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January 6, 2012 5:59:59 PM

selling recovery discs is illegal ?
:S
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January 6, 2012 7:24:26 PM

SteelCity1981I don't think you understand where i'm getting at you pay for the product key, when you buy a copy of windows, because the product key is what validates windows not the OS itself, which is why you can make as many copies of windows all you want but you can't do that with product keys and expect it to work.

Right, of course the key validates windows. What I am adding though is that you can have all the valid CD keys in the world (purchased, or OEM), but if you happen to search for a version of Windows that did NOT come on your computer (most commonly due to HDD failure) - you need to play at least the matching game to find a version of Windows with a corresponding build batch to your key. If you find a pirated version of Windows, and you have a valid CD key, there is an excellent chance it will not work with the first version you try. You play the luck of the draw to find a match here, Windows doesn't work like an application or most games do; many different versions of Windows exist (and no, not just Pro, Home, Ultimate, etc.). Hence, this is why I am saying you really are buying both. Contacting Microsoft with VALID CD keys in hand, will net you nothing. You will be told to repurchase again, they will not send you a version of windows that matches your key even if you tell them the key.
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January 6, 2012 8:15:37 PM

Linux=PROFIT?
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Anonymous
January 7, 2012 7:07:00 AM

All the laptops that I brought over the last few years, non of them came with restore disks. They all had a program to make restore disks which I used. Then a few weeks ago one of the laptops got a virus , so having the restore disks tried to reinstall W7 ,,,,, half way through I got " Windows not on disk "
Buyer Beware ,,, All PCs sold before Vista used to come with the restore disks in the box then Microsoft stopped the PC manufacturers from supplying them because they were worried about piracy ,,, yeah right ,,, It was Microsofts way of making the customer pay twice , they knew that the program doesnt work so Microsoft wants the customer to buy a copy of Windows

Sorry Microsoft but I refuse to pay for an OS that was already installed on the laptop again
Good on Comet for doing the right thing for their customers I hope they carry on and win this case ,,, its about time Microsoft were put in their place. And they still make a crappy OS that is so easy to get viruses and malware in this day and age ,,,,
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February 19, 2012 2:25:52 AM

viciouz2000maybe back in the past, but in today's current time and technology, you will rarely see a hard drive fail, you are more likely to replace the hard drive for a newer and bigger size one, i have plenty of old hard drive i dont use anymore because they are too small or too slow.


If this is true......... Then why have WD and Seagate drop their basic hard drive to only a 2 YEAR Warranty??? I have a Seagate 7200.12 750Gb that has a standard 3 yr warranty. It lasted the first 2 years before it died, but I have replaced the replacement drive 3 times in this last year. :( 
I also have 7 Seagate 7200.10 500Gb that came with a Standard 5 yr Warranty (in a home built server) and They are still going strong. M$ is out to make as much money as they can any which way they can.

Thank You For Your Time
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May 5, 2012 3:49:37 AM

I understand the situation, but, frankly speaking the only reason Comet seems to be wrong is for the charging the customer for the disc instead of charging the customer for services rendered.
As a PC builder and troubleshooter for the people, I have been creating recovery disks and partitions for donkeys years now for the people who had their PC or Laptops looked over by me but this has always been a free service, I usually have been teaching the people who use the machines that this is what is required in case of the HDD crashing.
The first repair has always been free, if they end up making it a habit and start running to me for every other problem, then, the charging starts.
Comet should have taken the consent of the customer on paper to be authorized to make recover discs for them when they bought the rig itself, give the first set free with the rig if required or when required and actually kept the 5 to 20$ margin in the price of the rig itself.
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