Eric Lundgren is chipper for someone who’s going to jail.
“I’ll have to live with the stigma of being a felon for the rest of my life,” Lundgren told me over the phone. “I’m OK with that…as long as people understand why. I just want to make sure the story gets out there.”
Lundgren is facing a 15 month stay in a federal prison and a $700,000 fine. A court in Miami rejected his appeal last week; he’s going to do the time and pay the money. His crime? He made copies of something Microsoft gives away for free on the internet—operating system restore and repair software—made them look like the original discs, and sold them. He pleaded guilty to one count of conspiring to traffic counterfeit goods and one count of criminal copyright infringement.
Computers are complicated devices. Software fails, hardware goes bad, and everyone needs to reinstall an operating system from time to time. In the past, most systems came with a “restore cd,” a way for a computer to reinstall the operating system and run basic diagnostics.
Here’s instructions, from Windows, on how to create your own for Windows 7. A restore CD isn’t enough to make the operating system work—users still need to have a product code to validate the software, something they can do via the internet or on the phone with Microsoft.
Lundgren is a e-waste recycling pioneer and career computer refurbisher. He’s worked in Africa, China, and the United States to reduce e-waste and help people get the most of out second-hand electronics. Several years ago, he noticed many computer manufacturers had stopped shipping restore discs with their computers (and many are lost by users.)
He knew that not everyone has a high speed internet connection, the means, or the know-how to burn a restore a CD. But there’s a booming aftermarket for used hardware in places like Africa and China, which means there’s a restore CD market for refurbishers.
Lundgren’s predicament highlights some of the issues that refurbishers face—too often, electronics manufacturers design products to be replaced instead of repaired.
“We have an alarming trend in the way our devices work now to make them…disposable,” Nathan Proctor, director of the US Public Interest Research Group’s Right to Repair campaign told me over the phone. “We spend all this energy, time, and resources to extract the materials but its designed in such a way that it can’t be repaired. Then, as soon as there’s any damage…it all becomes waste.”
One of the biggest problems facing people who want to reuse old devices is software. “After a while, software becomes impossible to get,” Proctor said. “That’s another way obsolescence is effectively enforced.” Lundgren planned to get around that forced obsolescence by manufacturing copies of Dell system restore CDs. He shipped them to a middleman—Robert Wolff—in 2012 with the plan to sell them at 25 cents each to cover the cost of their creation.
Lundgren didn’t just make thousands of copies of the restore CDs, he used a machine to reproduce the look as well. To the untrained eye, Lundgren’s discs looked exactly like the ones Dell produced in collaboration with Microsoft. Then he shipped them from China, which, a judge rules, was importing counterfeit material.
The discs sat in a warehouse for two years unused until Wolff called Lundgren up one day and told him he was sending him a $3,400 check for the discs. That’s roughly 14 cents a disc. It was a sting operation. Lundgren accepted the check and the federal government raided his home and arrested him.
Lundgren thought the charges were absurd and he spent years fighting them.
“I’m a recycler, I’m not a criminal,” he said. “This is a repair tool to fix computers that already have licenses.” But he couldn’t make a judge understand the distinction. “They were treating that CD as if it was the entire operating system,” he added.
The recycler’s lawyers hired a computer forensic expert to testify at his trial, but couldn’t make the judge understand what, exactly, a restore CD is. “He’s looking at me, some kid (Lundgren is now 33 years old)…and he hears the word ‘pirates.’ He hears the word ‘China,’” Lundgren said. “He referenced a computer as if it was a file cabinet. He was an older guy and he looked at the situation, looked at Microsoft and said, ‘Well, they’re the authority in the IT realm.’”
Microsoft initially claimed the discs were worth $300 each—the maximum it charges for a retail copy of a Windows license. After some back and forth with Microsoft during the trial, the court reduced the cost per disc to $25—the reduced cost of a Windows license if purchased through official Microsoft channels for a used computer.
The fact that the court changed the amount of the fine seems to be a tacit acknowledgement that a license and the restore disc aren’t the same thing: “If you don’t have a license…and you can’t contact Microsoft and verify that code and do the handshake with Microsoft, [the restore disc] is basically a frisbee. It’s not worth anything,” Lundgren said. “That’s like saying a gun, with or without bullets, operates the same.”
Lundgren said that all he was trying to do was make life easier for people buying used computers. “It’d be like if you bought a Jeep and Jeep had the oil cap locked down with this like crazy lock that you needed a special proprietary tool for and then they give you a little cheap plastic one that people lose. And then I’m coming. And I’m like, ‘Here’s the thing that you need to change your oil in your car’ and then Jeep wants to throw me in prison,” he said.
Microsoft doesn’t see it that way. “Microsoft actively supports efforts to address e-waste and has worked with responsible e-recyclers to recycle more than 11 million kilograms of e-waste since 2006,” it said in a public statement. “Unlike most e-recyclers, Mr. Lundgren sought out counterfeit software which he disguised as legitimate and sold to other refurbishers. This counterfeit software exposes people who purchase recycled PCs to malware and other forms of cybercrime, which puts their security at risk and ultimately hurts the market for recycled products.”
After his sentencing, Lundgren decided to retry his case in the court of public opinion. Microsoft defended itself in a lengthy blog post detailing detailing how it feels Lundgren misled the public about the specifics of the case. Microsoft said that the federal government, not Microsoft, pursued the case; that Lundgren and his co-defendant both pleaded guilty to the charges; and that Lundgren planned to set up a counterfeit supply chain based in China with the goal of making a profit off the discs.
Lundgren claimed he made, at most, 14 cents a disc on 28,000 discs he sold to the US Government as part of the sting. Microsoft and the courts said he made at least $92,000. That amount is tied to wire transfers and PayPal transactions made by Lundgren to Wolff, but the court transcripts don’t detail what they were for, just that they happened and that they occured around the time Lundgren had shipped discs.
"This is the goal—that I’m the last person who ever goes to prison over restore CDs or freeware"
The right-to-repair community feels bad for Lundgren, but they’re happy he started a conversation. “Microsoft…has the opportunity to lead the way,” Proctor said. “We’re hopeful that, thanks to all this media blow up, we can sit down and have a conversation about how to move forward and build a society that repairs and reuses as much as possible. Big companies like Microsoft are key to that.”
Microsoft told Motherboard that refurbishers in its two authorized/registered refurbishing programs have recycled more than 3 million computers in the past 12 months (Microsoft did not say how many computers were refurbished and resold vs how many have been recycled.) It also said users can drop off their used PCs at Microsoft stores for store credit or contact it for a shipping label to send their old machines directly to Microsoft approved recyclers. It said it’s recycled 152 million pounds of e-waste since 2006. It’s worth mentioning that at least some of this recycling is required by state laws affecting all electronics manufacturers.
Lundgren remains upbeat, despite his looming prison sentence.
“I’m in a great mood about this because I’ve gotten this crazy amount of support after coming and telling people what’s happened here,” he said. “I get about 100 emails a day from people I don’t know … they’re so supportive. I have a newfound faith in humanity.”
Prison doesn’t bother Lundgren, as long as his sentence starts a conversation and gets people talking about recycling and the right to repair movement. “I don’t care if I sit in prison,” he said. “In fact, I welcome going to prison if it can help change things.”
“This is the goal—that I’m the last person who ever goes to prison over restore CDs or freeware,” he added. “If I can be the last person then I am stoked to go. That action is going to spark change. Hopefully towards the right to repair, towards recycling and e-waste. That’s what I live for.”