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Topic: Software Development

Microsoft sues UK retailer for 'counterfeiting Windows' (updated-2)

Summary: Microsoft is taking one major UK technology retailer to court for "creating and selling" over 94,000 counterfeit copies of Windows.

Zack Whittaker

By for London Calling |

Microsoft is taking UK retailer and popular 'high-street' store Comet to the High Court in London for allegedly "creating and selling" more than 94,000 counterfeit recovery CDs of its Windows operating system.

In a press release issued this morning, Microsoft explained that it today issued proceedings against the retailer for selling the Windows Vista and Windows XP recovery disks to customers buying PCs with Windows installed.

The complaint identifies a factory in Hampshire, UK where Comet "produced and sold thousands of counterfeit Windows CDs to unsuspecting customers in the United Kingdom", adding that the company's actions were "unfair to customers".

Microsoft's associate general counsel, David Finn, said that its "customers deserved better".

Comet is owned by Kesa Electricals, a French company based in the UK. It is believed that the company is being sold to private equity firm OpCapita.

Many high street retailers sell Windows pre-installed on the computers and laptops they sell. Recovery CDs are often packaged along with the devices in case the operating system requires reinstalling.

Microsoft had stopped providing recovery CDs to some retailers, including Comet. As a cost saving measure, many PC manufacturers have stopped providing recovery CDs, and have turned to hard drive-based recovery options.

But Microsoft has been taking steps to reduce piracy in its latest versions of Windows, including copy-protection features. The next-generation operating system -- dubbed Windows 8 -- will include OEM BIOS activation allowing PC builders to pre-activate copies of Windows on the computers they sell.

Update 1: Comet did not deny the company produced the disks, but a statement said: "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".

The company added: "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".

Update 2: Microsoft retorts with a further statement from David Finn, adding a seemingly different perspective on things.

"In 2008 and 2009, Comet approached tens of thousands of customers who had bought PCs with the necessary recovery software already on the hard drive, and offered to sell them unnecessary recovery discs for £14.99 ($23)".

"Not only was the recovery software already provided on the hard drive by the computer manufacturer but, if the customer so desired, a recovery disc could also have been obtained by the customer from the PC manufacturer for free or a minimal amount".

Finn then added: "We’ve often encouraged our customers to buy from a trusted retailer.  In this case, it is disappointing that a well-known retailer created so many unwitting victims of counterfeiting", further criticising the UK retailer.

Image source: Flickr.

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Topics: Software Development, Microsoft, Windows

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  • RE: Microsoft sues UK retailer for 'counterfeiting Windows' (updated)

    Wow. Personally I don't see Comet did anything wrong here (assuming they are not making a profit from the recovery discs). Supplying a machine, and the means to recover it if it later develops a problem, seems utterly reasonable.

    This kind of [expletive] from Microsoft must surely put anyone off buying a PC (doesn't it?). I don't like this.
    jeremychappell
    Reply Vote

    • Someone at MS is about to get spanked

      @jeremychappell This is going to turn into a Fair-Use nightmare for them.
      happyharry_z
      Reply Vote

      • Unfair to the customer, my ass

        More like unfair to Microsoft. Can you say greed? Can you say patronizing?<br><br>They need to stop lying about that.
        ScorpioBlue
        Reply Vote

      • RE: Microsoft sues UK retailer for 'counterfeiting Windows' (updated)

        @ScorpioBlue - Agreed! This is pure greed on Microsoft's part.
        athynz
        Reply Vote

      • pete: Pure greed on MS's part?

        So you would be okay if Todd Bottom Inc. sold iPod chargers without paying Apple a licensing fee? Guess what, Kensington, Monster, and dozens (hundreds) of other companies would have a major problem with that. Apple has sued companies for selling unlicensed iDevice accessories to licensed owners of iDevices because if they didn't, Kensington, Monster, and dozens (hundreds) of other companies would stop paying Apple for the right.
        http://www.usatoday.com/tech/news/2010-07-29-appleknockoff29_ST_N.htm

        Is that pure greed on Apple's part? Of course you don't believe so.
        toddybottom
        Reply Vote

      • RE: Microsoft sues UK retailer for 'counterfeiting Windows' (updated)

        [i]@ScorpioBlue - Agreed! This is pure greed on Microsoft's part.[/i]<br><br>They need to just come out and say; <br><br>~<br><br>"We don't give a rat's ass about the customer. We only care about our greed and the bottom line by keeping our shareholders happy as fat pigs. We already have 90% of the desktop market so the 'customer' has no choice but to bend to our captive will and do what we say. Otherwise we cut them off and public opinion be dammed. They're already our suckers anyway"<br><br>~<br><br>Now that would be truthful. Unmitigated contempt for the buying public, OEMs and the retailers combined.
        ScorpioBlue
        Reply Vote

      • RE: Microsoft sues UK retailer for 'counterfeiting Windows' (updated)

        @Pete "athynz" Athens [i]Agreed! This is pure greed on Microsoft's part[/i]

        Unfortunately, with Update #2 comes this little tidbit....

        [i][b]Comet approached tens of thousands of customers who had bought PCs with the necessary recovery software already on the hard drive, and offered to sell them unnecessary recovery discs for ??14.99 ($23)[/b][/i]

        DOH....
        Badgered
        Reply Vote

      • I am 100% with MS on this one.

        @happyharry_z

        Comet was pretty crafty and they were turning a pretty darn good profit at 15 quid/disc. You have to figure they were mass produced at about 1 quid/disc so yea... Comet sold copied media for about 1 million in profit. Not much room for fair use in this one.
        Bruizer
        Reply Vote

      • RE: Microsoft sues UK retailer for 'counterfeiting Windows' (updated)

        @Badgered if given a choice, as apparently Comets customers have chosen, I???ll take a recovery DVD, USB key, etc over a recovery partition every day. What do you do when the HDD fails? With the recovery partition you???re forced to but another Windows license. With the other two you simply reinstall, reactivate. Which is better for the consumer? And offering service is not piracy, Microsoft just want to steal more money from the consumers.
        Rick_Kl
        Reply Vote

    • And yet Apple was praised for this exact same behavior

      @jeremychappell
      "This kind of [expletive] from Microsoft must surely put anyone off buying a PC (doesn't it?). I don't like this."

      Yet you praise Apple when they sue a company (Psystar) into bankruptcy because they paid for OS X discs and then sold computer systems with the contents of those discs installed on them. Surely that kind of [expletive] from Apple put you off buying a Mac, didn't it? Surely you didn't like it.

      Whatever happened to Comet having to abide by MS's licensing terms? Surely MS has the right to specify whatever licensing terms they want? Or would you uphold Apple's right to specify whatever licensing terms it wants but deny MS the same?
      toddybottom
      Reply Vote

      • Spirit of the law

        @toddybottom Comet clearly hasn't intended on supply counterfeit copies of Windows. The disks where supplied with machines with legal pre-installed versions, they where simply supply a recovery disk. You don't think MS should reconsider this action in light of that fact?
        ben.rattigan
        Reply Vote

      • RE: Microsoft sues UK retailer for 'counterfeiting Windows' (updated)

        @toddybottom Psystar's machines didn't have a license to run the software (these do). Psystar didn't supply "recovery discs", they supplied upgrades (where there was no qualifying product). So it's a completely different proposition.

        What you end up with here is a system that if the primary drive fails you're screwed. Now if you want to try and spin that as better for customers than what Apple do - go ahead.

        But in reality, where sane people live, this is not in the interests of customers.
        jeremychappell
        Reply Vote

      • jeremy: Comet didn't have a license for this either

        "Psystar's machines didn't have a license to run the software (these do). "

        Apple sued Psystar because when Psystar paid for an OS X license (by purchasing an OS X disk) they didn't have a license to install it on non Mac machines. Psystar breached the license they paid for.

        MS is suing Comet because when Comet paid for a Windows license they didn't have a license to create physical media and pass it off as a Microsoft Windows recovery disk. Comet breached the license they paid for.

        I never suggested Comet didn't have a license to install the OS on the hard drive but they did not have a license to create a physical restore disk and pass it off as a Microsoft Windows restore disk. Why is that so hard to understand?

        In both cases, MS and Apple got paid for a license and the purchaser got a license. In both cases, the purchaser used what they purchased in violation of the license.

        Yet you cheer it when Apple sues and you vilify MS. Hypocrite.
        toddybottom
        Reply Vote

      • I don't see anything wrong with what Comet is doing.

        @toddybottom: <i>I never suggested Comet didn't have a license to install the OS on the hard drive but they did not have a license to create a physical restore disk and pass it off as a Microsoft Windows restore disk. Why is that so hard to understand?</i><br><br>At least not morally. There may be a legal reason what they're doing is wrong but I don't see anything wrong with providing physical media for a license which has already been paid for.<br><br>It's like going out to the Internet to grab a copy of software you have a license, but no media, for. The media isn't the license.
        ye
        Reply Vote

      • ye: Comet is selling unlicensed Microsoft property for profit

        Comet isn't giving these copies away, they are charging customers for Microsoft copyrighted materials, materials that Comet is not licensed to resell.

        Go ahead, try to resell 94,000 copies of OS X Leopard after you've installed Lion on your 94,000 Macs and see how quickly Apple slaps a lawsuit on you. Then see how quickly jeremychappell cheers for Apple.

        When you aren't licensed to sell something, you can't do it. End of story.
        toddybottom
        Reply Vote

      • RE: Microsoft sues UK retailer for 'counterfeiting Windows' (updated)

        @ben.rattigan the case says that they sold the CDs to people who had purchased computers through them - Comet is probably equivalent to Best Buy in the US.

        In which case, they should have been asking HP, Acer etc. for recovery discs for their customers (or pointing their customers to the relevant manufacturers support system).
        wright_is
        Reply Vote

      • RE: Microsoft sues UK retailer for 'counterfeiting Windows' (updated)

        @toddybottom Comet didn't have any licence to sell Windows (other than pre-packaged retail boxes). They are a retailer, not a manufacturer - more like Best Buy than HP or Dell.
        wright_is
        Reply Vote

      • RE: Microsoft sues UK retailer for 'counterfeiting Windows' (updated)

        @toddybottom
        " I had no problem getting a recovery disc free of charge from CyberpowerPC."

        "Although, I just bought my mother a DELL and they wanted $15 for the recovery disc?"

        " Seriously, I prefer owning a retail version and avoid any down side. And hey anyone here should know that you can generate your own recovery disc from your oem computer. Or install the free version of Paragon Backup and Recovery from CNet and it will allow you to do this; the only draw back is you'll need a second hard drive for your backed up image and with todays prices for hard drives I would just buy a retail copy of Windows7 while they are still around for the next 14 months."
        Zurk_Orkin
        Reply Vote

      • The way I understand it is

        @toddybottom: <i>Comet isn't giving these copies away, they are charging customers for Microsoft copyrighted materials, materials that Comet is not licensed to resell.</i><br><br>Comet is purchasing licenses for Windows and then pre-installing Windows on the systems they sell. Thus the system is properly licensed for Windows. <b>In addition</b> Comet is also making a copy of the licensed software onto media and including it in the systems they sell.<br><br>I don't see any copyright infringement going on here. The software on the media they're including is paid for and thus licensed.<br><br>Or am I misreading something?
        ye
        Reply Vote

      • RE: Microsoft sues UK retailer for 'counterfeiting Windows' (updated)

        @toddybottom

        So Comet provided restore DVD's for their customers who purchased legal copies of Windows? And what's the first thing every OEM does after Windows is installed on their systems? That's right - create the restore DVD's. So they did this step for their customers and charged them for their time and the physical media to do this.... and Microsoft is suing them. This has all the makings of a PR nightmare.
        benched42
        Reply Vote
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