US v. Lundgren: When Recycling is a Crime

US v. Lundgren (11th Circuit 2018)

A pending case against recycler Eric Lundgren has now moved to the 11th Circuit Court of Appeals. Lundgren pled guilty to criminal copyright infringement and was sentenced to 15 months incarceration.  The basics are that he manufactured over 28,000 discs containing Dell/Microsoft Restore Discs and shipped them from China to the U.S.  Lundgren argued that the discs should be seen as publicly available since they don’t work without an access code and his actual plan involved using legitimate access codes that he had obtained from purchasers.  Microsoft apparently pushed the Miami FBI to pursue Lundgren for counterfeiting and last year he pled guilty to both Criminal Copyright Infringement and Conspiracy to Traffic in Counterfeit Goods.

  • 17 U.S.C. § 506(a)(1)(A) (“Any person who willfully infringes a copyright shall be punished … if the infringement was committed (A) for purposes of commercial advantage or private financial gain”).
  • 18 U.S.C. § 2320(a)(1) (“Whoever intentionally— (1) traffics in goods or services and knowingly uses a counterfeit mark on or in connection with such goods or services”).

The conspiracy to traffic in counterfeit goods is, I imagine, what really drove the charges — the problem with the discs was not only that they were Microsoft Restore discs, but that he had printed on them the Dell and Microsoft logos.  Of course, one trick with Conspiracy is that it is a future-crime – an agreement to commit a crime at some time in the future.

Because he pled guilty, Lundgren is not appealing his conviction, but rather is focusing on the 15-month prison sentence.  Basically, the sentence fits with the sentencing guidelines for the $700,000 in harm that the judge found ($25 per disc).  Lundgren argues on appeal that this calculation is incredibly off-the-mark since the discs were (at the time) given away for free by the companies.

Mark Rifkin and Randall Newman of Wolf Haldenstein (NY) are lead attorneys on the case.

15 thoughts on “US v. Lundgren: When Recycling is a Crime

  1. 7

    assuming facts not in the hypo –

    imaged the appropriate OEM Windows version on to the machines

    your hypo indicates the software was “appropriate,” but your machine is not indicated to be under any license. So no, the tangible medium was not licensed.

  2. 6

    the problem with the discs was not only that they were Microsoft Restore discs, but that he had printed on them the Dell and Microsoft logos

    That was a very silly thing to do.

  3. 5

    I don’t get why he bothered to counterfeit make the disks if they were being given away for free. Why not just tell your “customer” that you’re selling used codes and either let them get a free disk or else just contact the manufacturer to get a bunch of disks for yourself and give them away with the codes?

    I’m also somewhat surprised they went after the guy unless he was truly having success.

  4. 4

    Unactivated Windows 10 still works, but a user can see it is unactivated (and no one would likely accept it as supposedly legit). Then again, some recycled computers have prior versions of Windows burned in and apparently will fully activate by themselves – but in that case the commercial value would be more in the old authorization, rather than the installation software, which anyone can download for free. I do not see where the government connected the dots on the valuation of exactly what this guy was convicted of selling.

  5. 3

    Got to love how big business, and perhaps some political campaigns, are using the FBI to harass/prosecute their opponents for crimes that are yet to be committed, if ever.

    Reminds me of the practice of some be companies/firms who file inevitable disclosure type lawsuits against employees who leave to form their own companies, intending to bankrupt them with litigation expenses. What better could be then if he could get the government to actually litigate on their side. link to

    It seems that abuse of power and privilege is rampant in the United States.

    1. 3.1

      I find it ironic to contrast your comment here Ned “harass/prosecute their opponents for crimes that are yet to be committed, if ever.” with your comment on the “Minority Report” thread: “This is exactly the kind of technology we need.

      Have you seen the movie yet? Do you understand what that movie was about?

      1. 3.1.1

        anon, I said there that Cruz should have been intercepted the moment he walked out of his house gun in hand.

        The minority report is premised on seeing future crimes based on on evidence, but on some gestalt that is never fully explained. What I am suggesting is that we create an AI that predicts crimes based on evidence that the authorities can be prepared if an overt act is committed in furtherance.

    2. 3.2

      Actually, Ned, that was a favorite tactic of Stalin. You don’t like the person, then you send in the police to find a crime they committed. I think we are getting pretty close to that in the USA. Plus, I think the laws are so numerous and ill defined that almost anyone has committed crimes.

      1. 3.2.1

        Night, it does appear that abuse of power is rampant, perhaps more so in the Federal government and FBI than elsewhere. It is appalling that a group of FBI were able to conduct surveillance on the Trump campaign because members of the Democratic party made up a lot of stuff, gave it to Steele, who then gave it to the FBI with the intention to hurt Trump. The FBI seemed to be willing co-conspirators in this effort to undermine our democracy.

  6. 2

    I could do without the “clickbait” title.

    There is no colorable position here that “the crime” could remotely be construed to be recycling.

    One may attempt the stretch (to me, not an egregious over reach) that recycling may play a role as an element in a defense, or perhaps as a mitigating factor in a weighing a penalty to any actual crime, but that cannot justify the misleading headline.

    I suppose that “sellers going to sell, sell, sell.”

  7. 1

    Interesting attempt at applying the “data is free” concept.

    Curious though for the usual sAme ones: why is it that violation of copyright is coupled with a criminal penalty?

    1. 1.1

      “Interesting attempt at applying the ‘data is free’ concept.”

      Hardly. His argument was that the computers that he had purchased, which had certificates of authenticity or the license code sticker attached, came with OEM license rights to the Windows operating system and the restore disc data. And indeed, if you review the license the computers had those rights.

      However, streching those computer-by-computer rights to having tens of thousands of disks manufactured with Microsoft and Dell logos in China, then imported into the U.S., even if he intended to match them up to only those computers (so he says) probably went too far.

      It would have been interesting to see what the situation would have been if he had simply imaged the appropriate OEM Windows version on to the machines and provided users with instructions on how to create their own restore media (which Microsoft itself moved to doing after they stopped issuing physical restore media).

      1. 1.1.1

        I think you over state what the argument was DRJlaw.

        Bring it down to a bottom line: he was saying that the data he was copying was “free” (and freely distributed) and that it was only when certain additional data was put into play that the “value” was created.

        He was saying that it simply did not matter how many disks he manufactured, it was not the disks that created value – the disks (and the data thereon) was indeed “free.”

        Imaging the version on to the machines would not change the legal issue: you would have still affixed the item onto a tangible medium.


          “you would have still affixed the item onto a tangible medium.”

          But that particular tangible medium was licensed. The CDs were not.

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