Electronics-recycling innovator going to prison for trying extend computer lives

https://blogs.microsoft.com/uploads/prod/sites/5/2018/04/FIN...

> McGloin also testified about “certificate[s] of authenticity” (DE:145:45). A certificate of authenticity, or a “COA,” is a paper-based label that “contains security features, much like a bank note or [a] passport that is adhered to [stuck to] a device” (DE:145:45). During the conspiracy period, COAs typically contained a “product key” that could be used to activate the Microsoft OS software and verify the authenticity of the software license (DE:145:47). Importantly, however, an end user who purchased a computer with pre-loaded Microsoft OS software would not need the product key to activate the software (DE:145:47-48). This is because Microsoft allows devices sold by large OEMs like Dell to “bypass activation,”which means that an end user can start operating the computer without having to enter a product key (DE:145:48 (“COURT: So, if somebody bought a Dell laptop, and got it home, they plug it in and operate it? McGLOIN: Yes. COURT: And the end user does nothing else?McGLOIN: Correct. It gives the end user a nice experience, it works. THE COURT: It works.”)).

> What this creates, McGloin noted, is something called an “unconsumed” product key—i.e., a product key that goes unused, so to speak, because an end user never has had to enter it into the system, and hence Microsoft has not registered the use of that key as an “activation event” (DE:145:50-54). This “unconsumed” product key exists in “around 98 percent” of cases, McGloin testified, where the software was pre-installed by the OEM; there has not been a hardware failure; the end-user has not had to enter the product key; and Microsoft has not registered the use of that product key as an activation event (DE:145:50-54). In light of the vast number of unconsumed product keys,it is “very common,”McGloin explained, for computer refurbishers unlawfully to remove COAs with unconsumed product keys from one device and stick them on another device as away to grant a Microsoft software license impermissibly to an otherwise unlicensed device (DE:145:51). Indeed, there “is quite a large market for obtaining product keys from other devices and reselling them through a particular market, on Ebay or other means,” because they “[can] be used . . . in the refurbished market as a genuine license” (DE:145:81-82). And, as relevant here, these unconsumed product keys canbe used unlawfully to activate and use pirated versions of Microsoft OS Software like the Microsoft OS software contained on Lundgren’s counterfeit Reinstallation Disc