Microsoft Sues Retailer for Making 94,000 Fake Windows CDs

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?

People still buying XP and Vista hahaha

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.

@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.

This is the 1st plausible sue in months.

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.

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.

Ehh Crazy world................

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.

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...

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.)

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.

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.

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...

Might be different had Comet gave the CD away. Or, just charged an outrageous fee for a "CD".

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.

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?

"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!

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?

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.

When 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. I remember year and years back (10 years maybe) they used to included retail versions of windows with computer purchases. But they stopped that to save money on producing/distributing those disks to manufacturers and instead switched to an OEM version of windows for manufacturers.

Imagine M$ having to produce an additional 4 million copies of Windows, Then ship those to the pc manufacturers, who then have to included that with your computer to ship to you/store. The overhead is enormous.

I think the issue is that Comet does not manufacture the computers they sell nor do they install the OS on the computers. So they do not have any kind of licensing agreement with M$ for the distribution of the operating system, so in sense they do not have the right to make copies of other people's programs.

Let's just say your friend wanted to buy a Dell computer, but asked you to pay for it and have it shipped to your house. When it got to your house, you opened the computer made copies of the programs that came with the computer, delivered the computer to your friend. Then when your friend had a problem, you offered to sell him copies of his own software. Not right, not legal.

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...

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.

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.

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.

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.

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.

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.

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.

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.