Microsoft Sues Retailer for Making 94,000 Fake Windows CDs

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.

  • alidan
    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?
  • jiyung
    People still buying XP and Vista hahaha
  • singemagique
    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.
  • mitch074
    @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.
  • mrmaia
    This is the 1st plausible sue in months.
  • Goldengoose
    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.
  • DaveUK
    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.
  • spp85
    Ehh Crazy world................
  • teodoreh
    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.

  • memadmax
    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...