This E-Waste Recycler Is Going to Prison for Selling Windows Restore Discs to Put on Refurbished Computers

Eric Lundgren was sentenced to 15 months in prison and a $50,000 fine for creating ‘restore disks’ to extend the life of computers using Microsoft.

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Apr 25 2018, 4:24pm

In 1976, a 21-year-old Bill Gates wrote the now famous “Open Letter to Hobbyists” complaining that people were using the software he developed for Micro Instrumentation and Telemetry Systems (MITS) for free. At this point, Microsoft was only a year old and one of its first products was an interpreter for the BASIC programming language that was meant to run on MITS Altair 8800 computer.

To Gates’s dismay, even though MITS was selling thousands of Altairs per month, only a few hundred copies of his software for the computer were being sold. People were effectively pirating the software and as Gates expressed in his “open letter,” he found this to be very uncool. The letter sparked a debate about whether computers should come packaged with their software, and shortly thereafter Apple started advertising its computers based on its philosophy “to provide software for our machines free or at minimal cost.”

Microsoft is now a multibillion dollar enterprise rather than a startup run out of Gates’s apartment, but it still doesn’t want to give software away for free, even if it’s just a replacement for the software you’ve already bought. That’s why the 33-year old prolific e-waste recycler Eric Lundgren will be spending the next 15 months in prison and paying a $50,000 fine for making restore disks for people who had already purchased a Windows operating system.

In 2012, when Lundgren was living in China to source cheap parts to fix electronics in the US, he manufactured 28,000 Windows restore disks and sent them to a dealer in Florida. Restore disks are provided for free to anyone who purchases Windows software in case their computer crashes or gets wiped. Lundgren and the dealer had planned to sell the disks for 25 cents apiece to refurbished computer stores.

The shipment of the disks from China raised suspicions with US customs officers, who seized the disks and tracked down the Florida broker, a man by the name of Robert Wolff. Wolff entered a plea bargain with the government, and according to the Washington Post, called Lundgren to buy the disks for $3,400. When he agreed to the sale, authorities charged both Wolff and Lundgren with conspiracy to traffic in counterfeit goods and criminal copyright infringement.

Although Lundgren pleaded guilty, he claimed the disks had no value. Microsoft provides them for free with a purchase of its software and copies are available for free download on its website to anyone who has a purchase code. Nevertheless, prosecutors valued each of the seized disks at $299 apiece—the price of buying a new Windows OS—and claimed Lundgren had cost Microsoft $8.3 million by counterfeiting the software, even though the disks would only work for people who had already purchased a Microsoft OS. They were merely for the convenience of people who didn’t feel comfortable downloading the OS from the internet or for refurbished computers that didn’t yet have internet access.

The charge against Lundgren was later dropped to $25 a disk on the basis that this is what Microsoft charges computer refurbishers for copies of the disk. Still, this put Lundgren on the hook for $700,000 of counterfeit goods, which carried a 15-month sentence and $50,000 fine.

Lundgren appealed the ruling, but earlier this month a US court rejected his appeal. Lundgren told the Washington Post he didn’t think “anybody in that courtroom understood what a restore disk was.” It’s a strange turn of events for the right to repair movement, which has recently gained ground in the US and across the world.

“I am going to prison, and I’ve accepted it,” Lundgren told the Washington Post this week. “What I’m not okay with is people not understanding why I’m going to prison. “I got in the way of their agenda, this profit model that’s way more profitable than I could ever be. At what point do people stand up and say something? I didn’t say something, I just did it.”