Microsoft sues UK retailer Comet over fake Windows discs

By Lee Kaelin on January 4, 2012, 1:00 PM

Software giant Microsoft is suing UK electronics retailer Comet after it became apparent the store chain allegedly created, then sold 94,000 unauthorized "recovery" CDs to customers for Windows XP and Vista operating systems, between March 2008 and December 2009.

According to the Guardian newspaper, Comet disputes the claims saying it acted in the best interests of its customers. The fiasco happened after Microsoft stopped supplying recovery discs with new computers. They say the CDs were sold to existing customers so they had a means to recover their Windows operating system in the case of hard disk failure.

"As detailed in the complaint filed today, Comet produced and sold thousands of counterfeit Windows CDs to unsuspecting customers in the United Kingdom," said Microsoft lawyer David Finn, in a statement to the newspaper. "Comet's actions were unfair to customers. We expect better from retailers of Microsoft products — and our customers deserve better, too."

Microsoft has advised anyone who has purchased the discs from Comet to check their "How to Tell" page if they are concerned whether the disc is genuine or not. The webpage offers advice and steps required to verify the media is genuine.

Comet admits producing the CDs at a factory in Hampshire and then selling them across its entire chain of stores. The retailer believes that those actions did not infringe on Microsoft's intellectual property.  "Comet firmly believes that it acted in the very best interests of its customers," a spokesperson said in a statement.

"It believes its customers had been adversely affected by the decision to stop supplying recovery discs with each new Microsoft operating system based computer." They believe they have a solid defence and will vigorously oppose the lawsuit.




User Comments: 30

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Guest said:

LOL they made fake copys of windows then sold them. LMFA well they are screwd glad i dont own shars in this company

Lionvibez said:

Yep they are *ucked.

Making copies and then selling = screwed.

MS doesn't get a cut of your sales for those copies dumb asses it when straight into their pockets what did they expect was going to happen.

Guest said:

They did not make fake copies of windows, they made recovery discs so if your computer crashes you can boot from the disc and restore your system from a backup or do other repairs. They did not have a right to make a profit though.

Anyone can make a recovery disc, I do it every time I get a new PC, its an option in every new windows install, it's built right in, just pop in a blank CD and type system repair disc in windows search and follow the next 2 or 3 clicks to burn a copy.

freedomthinker said:

If this is the case, they could probably sue half of Europe and Asia. Seriously, most retailers use fake copies, at least thats the case is this side of Europe !

Guest said:

wait what ?

each machine comes with a license does it not?

and the copy of windows is just a COPY with no license... which is fine .. they are providing a service of making a disk for the customer.

or is this NOT the case? PC did not come with license? and used a hack to activate?

Its NOT clear here.

Guest said:

I don't see the problem, it's not like they were selling actual copies of Windows with fake or invalid CD keys. They were simply selling installation disks, you must actually own or purchase a license to install and register Windows. Microsoft should be providing their own recovery disks. In fact I own a license for all my copies of Windows, however I download the untouched installation iso from torrents since Microsoft doesn't provide recovery disks with new computers. If that's breaking the law, well Microsoft can go eff themselves.

jester376 said:

Guest said:

They did not make fake copies of windows, they made recovery discs so if your computer crashes you can boot from the disc and restore your system from a backup or do other repairs. They did not have a right to make a profit though.

Anyone can make a recovery disc, I do it every time I get a new PC, its an option in every new windows install, it's built right in, just pop in a blank CD and type system repair disc in windows search and follow the next 2 or 3 clicks to burn a copy.

This statement is entirely false. They didn't make them from the computer, they manufactured them out of another company. So, if customers try to reinstall windows with these discs, they won't get a genuine windows install like they would from a set of recovery discs of the current OS on the computer. Microsoft will know that the installed version is not a genuine windows and then the customer will not get updates and will have a slew of problems. Like Microsoft said, this is unfair to the customer, and on another token, Comet is stealing profits from Microsoft as well.

Adhmuz Adhmuz, TechSpot Paladin, said:

jester376 said:

This statement is entirely false. They didn't make them from the computer, they manufactured them out of another company. So, if customers try to reinstall windows with these discs, they won't get a genuine windows install like they would from a set of recovery discs of the current OS on the computer. Microsoft will know that the installed version is not a genuine windows and then the customer will not get updates and will have a slew of problems. Like Microsoft said, this is unfair to the customer, and on another token, Comet is stealing profits from Microsoft as well.

Thats not at all what is being done here, they aren't selling them as full retail copies, just a disc that allows you to reinstall your os with your original license key. Imagine you buy a laptop with a recovery partition and the hard drive crashes? How are you suppose to reinstall your OS? You have a key just no means to install it, so you either bring it to your local computer repair shop where they'll put in a disc corresponding with your version of windows. Now why not just buy a disc to do this yourself? The only illegal part of what is being done here is the sale of the discs themselves. A genuine windows install is in the license key not the disc, but there are disc that exist that bypass the need for such a code and they are the real problem.

Guest said:

No it's not false. There is a big difference in selling a pirated copy of "Windows" as some have said and selling a recovery disc... That's all I was pointing out. Don't argue for the sake of arguing. I never said they made them from a computer I'm saying anyone can make one legally, I always make a back up and a recovery disc of my installs, if I were to just make a backup how could I recover my install if my computer won't even boot up, well I would need a recovery disc.

caravel said:

Comet don't have a leg to stand on - it's pretty much an open and shut case.

If Comet had been providing a "service" to customers and "acting in their best interests" it would not have needed to set up a factory to produce these discs or to charge £14.99 (about $23.50) for them - effectively charging customers again for unofficial copies of software they have already paid for. Also mickeyshaft provide the means for the end user to produce their own recovery media for the price of a few DVD-R's.

supportme said:

Guest said:

I don't see the problem, it's not like they were selling actual copies of Windows with fake or invalid CD keys. They were simply selling installation disks, you must actually own or purchase a license to install and register Windows. Microsoft should be providing their own recovery disks. In fact I own a license for all my copies of Windows, however I download the untouched installation iso from torrents since Microsoft doesn't provide recovery disks with new computers. If that's breaking the law, well Microsoft can go eff themselves.

If Comet had just given the CDs or helped the customers for free then it wouldn't matter. But they charged the customers.

captaincranky captaincranky, TechSpot Addict, said:

I don't see the problem, it's not like they were selling actual copies of Windows with fake or invalid CD keys. They were simply selling installation disks, you must actually own or purchase a license to install and register Windows. Microsoft should be providing their own recovery disks. In fact I own a license for all my copies of Windows, however I download the untouched installation iso from torrents since Microsoft doesn't provide recovery disks with new computers. If that's breaking the law, well Microsoft can go eff themselves.
To the best of my knowledge, M$ doesn't actually sell computers. That said, it isn't incumbent upon them to supply anything. "Recovery discs", are the province of the actual manufacturer, eMachines, HP, or whomever.

OEM Windows discs are supposed to be installed with an "OEM preinstallation kit. In practice, the end user normally doesn't get the OEM Windows disc, but rather a C:/ drive image, billed as "recovery discs.

Guest said:

@supportme: Of course they charged the customers. They are providing a service. They are creating recovery discs for the customer. It costs manufacturing fees (time/cost of disc/etc). They should make a profit from such a helpful service that Microsoft sure as hell doesn't provide.

@captaincranky: It is Microsoft that chose to no longer provide an installation disk, this forced PC manufactures to create and provide recovery discs, which cost them money so they now cheap out by creating recovery partitions. What happens when your harddrive dies or you simply want to upgrade your harddrive?

The point is Microsoft does not sell or provide recovery discs, neither do PC manufactures. Comet is not selling illegal licenses, only recovery CDs (which you can create yourself for free, and legally). This doesn't hurt anyone. Microsoft is not losing any money, neither are PC manufactures. Only Comet and their customers stand to gain.

Guest said:

WTF k i see that some of you do not understand. They put windows on a DVD then sold or charged a a fee. Did not bother informing microsoft that they were charging a fee and did not give them there cut. First off if they had just it gave away and sed sorry we forgot to give this to with your computer. But no they charged a fee making a profit on a copy they already sold and do not have a license for anymore. that license was trasnfeerd to the customer. LMFA you would think there lawyers would have informd them of this befor going forward

Guest said:

also if Microsoft stoped supplyng these then what right do they have to go behind Microsofts back and make them thereselfs then sell for there own profit. I do not agree with what microsoft is doing. You see they must want you to buy a copy if your computer @%#$$ up or pay a fee to fix it to microsoft. I see what there up to but the law is the law. you can not make your own disk and sell it for any reason. case closed

Emexrulsier said:

What some ppl are failing to understand is that Comet were not making fake copies of windows and selling them on the store shelfs in a way that MS were loosing out in any sort of the revenue. The copies did not include a product key which is essentially what you are buying when you buy from MS. The OEM sticker would have been included on the PC so MS would have made thier money from the sale but like most modern pcs recovery is just stored on a partition of the HD (it didn't used to be and some resllers still dont) many though prefer a hardcopy so Comet stepped and assisted. Comet could argue that a customer is fully capable of created their own recovery disk by comet offer the creation service for them at an additional charge... law suit gone!

Its just probs been a bad Q4 for MS so they are looking for ways to increase Q1 revenues to start the year off.

DanUK DanUK said:

Guest said:

LOL they made fake copys of windows then sold them. LMFA well they are screwd glad i dont own shars in this company

Troll much?

+1 to Emexrulsier though, this is being made out to be a lot worse than it actually is. It's just recovery discs not full blown licenced copies. They're not stealing money from microsoft.

caravel said:

It's just recovery discs not full blown licenced copies. They're not stealing money from microsoft.

So your typical pirate copy is licensed now? The only licensed copies of windows are those supplied by mickeyshaft themselves.

A separate company actually manufacturing it's own copies of proprietary software and selling it to their customers for £15 is not just piracy, it's the most ludicrous of idiocy. Any other arguments don't wash.

You're possibly assuming windows is just a "licence" and that apart from that everyone and their uncle can simply pass burned discs around when it suits their fancy, selling them on for knock down prices even...

Windows is distributed under a highly restrictive proprietary software licence. When you buy windows, you don't buy "it", you buy a licence to use[i/] "it", on one PC with a certain number of cores. You are allowed to make one backup copy for the same PC. You are not allowed to do anything else. Next time you install windows, maybe read that and if you don't like the terms click no/decline/whatever - because unfortunately the licence does not enable you to manufacture and sell "unofficial" restore discs and flog them for fifteen quid a time...

If Comet had been giving away these discs with every PC instead of actually selling them on a by request basis, they might have a good case for a defence - if nothing else they could at least claim ignorance. As it stands they will need very good lawyers to get out of this without paying up.

PinothyJ said:

Both parties are in the wrong here with Microsoft failing to give you the appropriate discs whilst keeping the attitude of "you have a burner in that machine, go burn your own!" and leaving it at that. The big problem then comes when you buy an ultrabook or netbook that does not have an optical drive, Microsoft expect you to buy an optical drive just so you can make a recovery disc of an operating system that you legally own.

Comet should NEVER have charge money for what was not theirs. This would only have been acceptable if the charge simply covered the manufacture of the discs themselves and nothing else; if this were the case than I am standing with Comet on this one.

Microsoft, Microsoft...

caravel said:

Both parties are in the wrong here with Microsoft failing to give you the appropriate discs whilst keeping the attitude of "you have a burner in that machine, go burn your own!" and leaving it at that. The big problem then comes when you buy an ultrabook or netbook that does not have an optical drive, Microsoft expect you to buy an optical drive just so you can make a recovery disc of an operating system that you legally own.

1) I believe the system vendors have an agreement with mickeyshaft when they ship it's OS that they can provide "system restore media" or whatever you want to call it, the system vendors choose to include this on a partition on the system's fixed disk rather than on optical media (lower costs). So I'm afraid you're wrong and can't blame them for that...

2) You don't legally own the windows operating system, you own a licence to run it and must comply with the terms of the licence agreement. If you do not like the terms, don't buy/install/accept it.

This would only have been acceptable if the charge simply covered the manufacture of the discs themselves and nothing else; if this were the case than I am standing with Comet on this one.

Which cannot be proven either way, will not stand up in court anyway and is not permitted under the licence terms of the software either...

Guest said:

@caravel: Huh? No your typical pirated version of Windows is cracked so it doesn't need to be activated with a valid license. You said it yourself, you're buying a license to Windows, not the disc. So selling a disc for recovery purposes without a license is NOT piracy. It depends how you look at it, Comet is charging because it costs them money to create that recovery disc. Nothing is free when provided as a service. Obviously the law will be on Microsoft's side, but you don't have to agree with it.

caravel said:

@caravel: Huh? No your typical pirated version of Windows is cracked so it doesn't need to be activated with a valid license.

That's what I said, pirate versions of windows do not ship with a licence...

The discs Comet distributed also did not have a licence, which some seem to believe makes them legal...?!

You said it yourself, you're buying a license to Windows, not the disc.

You're buying:

1) A Licence to use the software.

2) A disc.

3) Packaging and documentation.

You don't automatically get rights to resell and redistribute. All of that aside, Comet are not even the end user so that's somewhat irrelevant anyway...

So selling a disc for recovery purposes without a license is NOT piracy.

*sigh*

Redistributing proprietary software - for "recovery" or otherwise - without a licence is close to piracy (in MS' language it is piracy) - add "selling" to that and you have pretty clear cut piracy. Unauthorised copies were generated and sold for to end users for profit, end users who had already paid for the software - Comet were selling software which wasn't theirs to sell in the first place. Whatever Comet's intent, they have fouled up badly and should have known better. The fellow who authorised this is most likely going to be out of a job, whatever happens next.

Redistribution with a fee to cover the media, etc is permissible under certain free software licences (MIT, BSD, GNU GPL, etc) but certainly not under any mickeyshaft licence...

It depends how you look at it, Comet is charging because it costs them money to create that recovery disc. Nothing is free when provided as a service. Obviously the law will be on Microsoft's side, but you don't have to agree with it.

No I think you'll find that it depends on how MS, the lawyers and the courts see it. Right and wrong and our own personal opinions don't come into it.

Comet should not have created the recovery discs - they are just a reseller - such agreements are formed with the OEM. Comet are squarely to blame here and pulling the old "in consumers' interests" bollocks is not going to cut it.

Guest said:

@caravel:

*sigh*

So if it were the PC manufacturer who included the recovery disc with their computers, that would be fine? You don't think they factor in additional costs when pricing their computers? Of course they do, however minor, that recovery disc is included in the price of the computer. Therefore for they are "legally" selling recovery discs.

As for your comment about buying the license, disc, packaging and documentation. Sure if you purchase from a retail outlet, of course you can buy licenses directly from Microsoft without any disc packaging or documentation.

Microsoft includes the ability to create your own recovery discs within Windows. Comet is simply doing this for customers who are too computer illiterate to do it for themselves. Of course they're going to charge for such a service.

You're obviously just looking to argue and come out as being "right". As I said, I know Microsoft has the law on their side, but that doesn't mean I have to agree with it. If you're too ignorant to understand that, then so be it.

cliffordcooley cliffordcooley, TechSpot Paladin, said:

Comet needs to counter sue MS for not supplying a way to recover from a HDD crash. Comet was willing to overlook the issue and fix this stupidity themselves. This wouldn't even be an issue if MS hadn't decided to cut corners and eliminate the hard copy of their work.

caravel said:

@caravel:

*sigh*

So if it were the PC manufacturer who included the recovery disc with their computers, that would be fine? You don't think they factor in additional costs when pricing their computers? Of course they do, however minor, that recovery disc is included in the price of the computer. Therefore for they are "legally" selling recovery discs.

The PC manufacturer (OEM) has a deal with mickeyshaft... that's what some of those responding here, including you Guest, don't seem to get. The retailer (in this case Comet) does not have any kind of deal with Microsoft or the OEM, they simply resell.

As for your comment about buying the license, disc, packaging and documentation. Sure if you purchase from a retail outlet, of course you can buy licenses directly from Microsoft without any disc packaging or documentation.

Comet are not the end user they're a reseller. Once again: Comet manufactured illegal copies and sold them on to end users for profit, Some people here think that's permissible because those end users had a windows licence. It's not allowed by the proprietary software licence under which windows OS is distributed..

Microsoft includes the ability to create your own recovery discs within Windows.

Which makes Comet's case even weaker. Selling something which the OS allows the end user to create at the cost of a DVD-R (a few of which are often supplied with OEM systems).

Comet is simply doing this for customers who are too computer illiterate to do it for themselves. Of course they're going to charge for such a service.

I'm afraid that what you fail to understand is that they are not legally allowed to copy and redistribute it in the first place. They should not even be providing the "service"...

You're obviously just looking to argue and come out as being "right".

Whereas you are...?

I consider myself to be reasonably correct on this. What I have stated so far is in a nutshell: Comet redistributed copyrighted, patented material protected under a proprietary software licence, without authorisation from mickeyshaft, on an "industrial" scale. Ethics or whether you or I agree with this, don't even come into that.

As I said, I know Microsoft has the law on their side, but that doesn't mean I have to agree with it. If you're too ignorant to understand that, then so be it.

I see, so someone is "too ignorant to understand" because they don't agree with you?

Mickeyshaft have the law on their side, this is why I consider myself to be reasonably correct. I also think the "ethical" argument being bandied around here is complete and utter bollocks. If you dislike their licensing or how OEMs wh0re themselves out to them, you have the following option - do not buy branded machines that ship with windows (also be aware that OEM windows is passed on to the end user at a much lower cost than a retail copy - it's about proliferation and dominance of the desktop OS market.). Mickeyshaft got where they are today because people, complained about restrictions, bitched and moaned about invasive copy protection and validation methods, yet still bent over, greased up and bought their products.

Mickeyshaft stopped supplying the real OEM windows discs with systems because unscrupulous retailers were flogging them on at knockdown prices, reusing them on multiple systems and stacks of them were finding their way into car boot sales and computer fairs. Mickeyshaft are not to blame.

Instead OEMs can provide the means of system recovery under their licence agreement with Mickeyshaft. OEMs chose to cut costs (and corners) and have taken to the shittastic "recovery partition" idea. The OEMs did that, not Mickeyshaft (apparently some OEMs do still provide discs, though I've never actually come across any as yet).

Mickeyshaft provide the user with a means of creating a proper system recovery back up. Like most Windows programs it's designed for idiotas - your average "computer illiterate" grandmother could slip in a DVD and run the backup. Windows 8 apparently has made further improvements on this. Most OEMs also provide their own tools for creating "system restore discs"...

When you buy retail windows, you buy it on a disc for the retail price. The licence usually enables you to make no more than one backup and only install it on one PC.

When you buy OEM windows, you buy it pre-installed on a PC (the service for your "computer illiterates" who do not know how to install an OS), you are entitled to make one backup of this to reinstall only on the same hardware. The Mickeyshaft licence actually considers a second installation or backup contained on the same HDD as the "backup" copy...

There is nothing in the licensing however allowing retailers to create these backups for the user, get them mass produced at a factory, branded up and sold back to the user for £15 a time. Comet were not providing a service, they were simply preying on ignorance and making a profit out of it.

Guest said:

All they have to do is tell the judge that they did not charge for Windows. Only for the labor in creating the disk. Case dismissed.

Guest said:

You obviously have a lot of time on your hands and will argue to the bitter end. I stated my opinion, you don't have to agree with it.

caravel said:

You obviously have a lot of time on your hands and will argue to the bitter end.

So, assuming this is the same poster; when someone disagrees with you they're "too ignorant to understand" and if someone argues against your views it's because they have "a lot of time on [their] hands"...

I stated my opinion, you don't have to agree with it.

That's charitable of you...

Guest said:

@caravel: Yes, I am the same poster. You win! Your prize is three statements you can argue about :

1. Rely on foods that take little or no cooking. Use dishes you have frozen.

2. Send out the laundry or hire someone to come in and do it. Try to create less laundry.

3. As the fire burns down the kindling, it will be necessary to adjust the logs and possibly add more newspaper to the top of the fire or under the kindling.

Guest said:

@caravel: Taking my words out of context. I don't agree with you. You don't agree with me. I don't understand why you feel the need to continue. I'm not religious, but I don't force my views on those who are. Sometimes it's best to agree to disagree.

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