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Microsoft Sues Retailer for Making 94,000 Fake Windows CDs

By - Source: Microsoft | B 43 comments

What would MC Double Def DP say? Apart from, "Don't copy that floppy," of course.

UK retailer Comet is being sued by Microsoft for supposedly making and then selling fake Windows CDs. Redmond said in a release that it had filed a suit against Comet Group PLC for allegedly creating and selling more than 94,000 sets of counterfeit Windows Vista and Windows XP recovery CDs in a factory in Hampshire. The alleged counterfeits were sold to customers who had purchased Windows-loaded PCs and laptops from Comet retail stores across the UK.

"As detailed in the complaint filed today, Comet produced and sold thousands of counterfeit Windows CDs to unsuspecting customers in the United Kingdom," said David Finn, associate general counsel, Worldwide Anti-Piracy and Anti-Counterfeiting at Microsoft. "Comet's actions were unfair to customers. We expect better from retailers of Microsoft products — and our customers deserve better, too."

However, it seems Comet is putting the blame on Microsoft. 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.

"We note that proceedings have been issued by Microsoft Corporation against Comet relating to the creation of recovery discs by Comet on behalf of its customers.  

Comet has sought and received legal advice from leading counsel to support its view that the production of recovery discs did not infringe Microsoft’s intellectual property.

Comet firmly believes that it acted in the very best interests of its customers.  It believes its customers had  been adversely affected by the decision to stop supplying recovery discs with each new Microsoft Operating System based computer.

Accordingly Comet is satisfied that it has a good defence to the claim and will defend its position vigorously."

What's unclear from this particular statement is whether Comet was actually charging customers for the discs or just including them with Windows machines sold at each of its stores (which would still be distribution of unauthorized copies of Microsoft's software). However, in a statement sent to the Verge, the company confirmed that the discs were sold to customers and sent directly to each customer after purchase. The company did not specify how much it charged customers for the discs.

"The discs were sold alongside new PCs. Each set of recovery discs were specific to the customer’s new laptop and were sent after purchase directly to each customer."

We'll keep you posted on any developments.

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Top Comments
  • 13 Hide
    mrmaia , January 5, 2012 8:23 AM
    This is the 1st plausible sue in months.
  • 10 Hide
    mitch074 , January 5, 2012 8:15 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.
  • 10 Hide
    memadmax , January 5, 2012 9:17 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...
Other Comments
  • 3 Hide
    alidan , January 5, 2012 7:44 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?
  • -7 Hide
    jiyung , January 5, 2012 7:59 AM
    People still buying XP and Vista hahaha
  • 4 Hide
    singemagique , January 5, 2012 8:00 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.
  • 10 Hide
    mitch074 , January 5, 2012 8:15 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.
  • 13 Hide
    mrmaia , January 5, 2012 8:23 AM
    This is the 1st plausible sue in months.
  • 0 Hide
    Goldengoose , January 5, 2012 8:37 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.
  • -4 Hide
    DaveUK , January 5, 2012 8:46 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.
  • 0 Hide
    spp85 , January 5, 2012 9:13 AM
    Ehh Crazy world................
  • 7 Hide
    teodoreh , January 5, 2012 9:17 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.

  • 10 Hide
    memadmax , January 5, 2012 9:17 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...
  • 0 Hide
    Miharu , January 5, 2012 11:12 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.)
  • 1 Hide
    AndrewMD , January 5, 2012 11:54 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.

  • -8 Hide
    nebun , January 5, 2012 12:21 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.
  • 0 Hide
    englandr753 , January 5, 2012 12:27 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...
  • 0 Hide
    sunflier , January 5, 2012 12:29 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".
  • 0 Hide
    back_by_demand , January 5, 2012 12:56 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.
  • 0 Hide
    jojesa , January 5, 2012 1:10 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?
  • 0 Hide
    damianrobertjones , January 5, 2012 1:12 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!
  • 1 Hide
    Tamz_msc , January 5, 2012 1:37 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?
  • 2 Hide
    bigdragon , January 5, 2012 1:54 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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