I found this interesting, as I have been trying to keep an old Gateway
computer alive by loading Ubuntu Linux on it. I found a replacement
battery for it at Batteries Plus, but the battery proved defective. This
article makes me hate billionaire Bill Gates even more than I already
did. -- Steve
Electronics-recycling innovator is going to prison for trying to extend
computers' lives
http://www.latimes.com/business/technology/la-fi-tn-microsoft-copyright-20180426-story.html
latimes.com
Electronics-recycling innovator is going to prison for trying to extend
computers' lives
Washington Post
Electronics-recycling innovator is going to prison for trying to extend
computers' lives
Eric Lundgren dismantles e-waste for hybrid recycling at his facility in
Chatsworth. (David Sprague)
A Southern California man who built a sizable business out of recycling
electronic waste is headed to federal prison for 15 months after a
federal appeals court in Miami rejected his claim that the "restore
discs" he made to extend computers' lives had no financial value,
instead ruling that he had infringed on Microsoft Corp. to the tune of
$700,000.
The appeals court upheld a federal district judge's ruling that the
discs Eric Lundgren made to restore Microsoft operating systems had a
value of $25 apiece, even though the software they contained could be
downloaded free and the discs could only be used on computers that
already had a valid Microsoft license. The U.S. 11th Circuit Court of
Appeals initially granted Lundgren an emergency stay of his prison
sentence, shortly before he was to surrender, but then affirmed his
original 15-month sentence and $50,000 fine without hearing oral
argument in a ruling issued April 11.
Lundgren, 33, has become a renowned innovator in the field of electronic
waste, or e-waste, using discarded parts to do things such as construct
an electric car, which in a test far outdistanced a Tesla on a single
charge. He built the first "electronic hybrid recycling" facility in the
United States, which turns discarded cellphones and other electronics
into functional devices, slowing the stream of harmful chemicals and
metals contained in those devices into landfills and the environment.
His Chatsworth company, IT Asset Partners, processes more than 41
million pounds of e-waste each year and counts IBM, Motorola and Sprint
among its clients.
"This is a difficult sentencing," U.S. District Judge Daniel T.K. Hurley
told him last year, "because I credit everything you are telling me. You
are a very remarkable person."
Before he launched IT Asset Partners, Lundgren lived in China learning
about the stream of e-waste, and also finding ways to send cheap parts
to the U.S. to keep electronics running. One of his projects was to
manufacture thousands of "restore discs," supplied by computer makers as
a way for users to restore Windows software to a hard drive if it
crashes or must be erased. The discs can only be used on a computer that
already has a license for the Windows operating system, and the license
transfers with the computer for its full life span. But computer owners
often lose or throw out the discs, and though the operating system can
be downloaded free on a licensed computer, Lundgren realized that many
people didn't feel competent to do that, and were simply throwing out
their computers and buying new ones.
Lundgren had 28,000 of the discs made and shipped to a broker in
Florida. Their plan was to sell the discs to computer refurbishing shops
for about 25 cents apiece, so the refurbishers could provide the discs
to used-computer buyers and wouldn't have to take the time to create the
discs themselves. And the new user might be able to use the disc to keep
their computer going the next time a problem occurred.
But in 2012, U.S. Customs officers seized a shipment of discs and began
investigating. The discs were never sold. Eventually, the Florida
broker, Robert Wolff, called Lundgren and offered to buy the discs
himself as part of a government sting, Lundgren said. Wolff sent
Lundgren $3,400 and the conspiracy was cemented. Both were indicted on a
charge of conspiracy to traffic in counterfeit goods and criminal
copyright infringement. Wolff made a plea deal and received a sentence
of six months of home arrest.
Lundgren pleaded guilty but argued that the value of his discs was zero,
so there was no harm to anyone. Neither Microsoft nor any computer
manufacturers sell restore discs. They supply them free with new
computers, and make the software available for free downloading, for
those who have paid for the software and received a license — typically
a sticker with a "certificate of authenticity" number on it. Lundgren
said that he was trying to make the discs available again for those who
needed them, and that they could only be used on licensed computers.
Initially, federal prosecutors valued the discs at $299 each, or the
cost of a brand new Windows operating system, and Lundgren's indictment
alleged he had cost Microsoft $8.3 million in lost sales. By the time of
sentencing, a Microsoft letter to Hurley and a Microsoft expert witness
had reduced the value of the discs to $25, stating that was what
Microsoft charged refurbishers for the discs.
But both the letter and the expert were pricing a disc that came with a
Microsoft license. "These sales of counterfeit operating systems
displaced Microsoft's potential sales of genuine operating systems,"
Microsoft lawyer Bonnie MacNaughton wrote to the judge. But Lundgren's
discs had no license; they were intended for computers that already had
licenses.
Glenn Weadock, a former expert witness for the government in its
antitrust case against Microsoft, was asked: "In your opinion, without a
code, either product key or COA [certificate of authenticity], what is
the value of these reinstallation discs?"
"Zero or near zero," Weadock said.
Why would anybody pay for one? Lundgren's lawyer asked.
"There is a convenience factor associated with them," Weadock said.
Still, Hurley decided that Lundgren's 28,000 restore discs had a value
of $700,000, and that dollar amount qualified Lundgren for a 15-month
term, along with a $50,000 fine. The judge said he disregarded Weadock's
testimony. "I don't think anybody in that courtroom understood what a
restore disc was," Lundgren said.
A three-judge panel of the 11th Circuit deferred to Hurley in his
judgment that Weadock was not credible, and that "while experts on both
sides may have identified differences in functionality in the discs,
[Hurley] did not clearly err in finding them substantially equivalent."
Randall Newman, Lundgren's lawyer on the appeal, said there was no basis
to seek a rehearing from the full 11th Circuit. Lundgren said an appeal
to the U.S. Supreme Court would be a costly long shot.
But he said the court had set a precedent for Microsoft and other
software makers to pursue criminal cases against those seeking to extend
the lifespans of computers. "I got in the way of their agenda," Lundgren
said, "this profit model that's way more profitable than I could ever be."
Lundgren said he wasn't sure when he would be surrendering. He said
prosecutors in Miami told him he could have a couple of weeks to put his
financial affairs in order, including plans for his company of more than
100 employees. "But I was told if I got loud in the media, they'd come
pick me up," Lundgren said. "If you want to take my liberty, I'm going
to get loud."
A spokeswoman for the U.S. attorney's office in Miami declined to
comment Monday.
"I am going to prison, and I've accepted it," Lundgren said Monday.
"What I'm not OK with is people not understanding why I'm going to
prison. Hopefully my story can shine some light on the e-waste epidemic
we have in the United States, how wasteful we are. At what point do
people stand up and say something? I didn't say something, I just did it."
--
"The world is one big prison yard; some of us are prisoners and some of
us are guards." Bob Dylan
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