Eric Lundgren is obsessed with recycling electronics.

He built an electric car out of recycled parts that far outdistanced a Tesla in a test. He launched what he thinks is the first “electronic hybrid recycling” facility in the United States, which turns discarded cellphones and other electronics into functional devices, slowing the stream of harmful chemicals and metals into landfills and the environment. His Chatsworth company processes more than 41 million pounds of e-waste each year and counts IBM, Motorola and Sprint among its clients.

But an idea Lundgren had to prolong the life of personal computers could land him in prison.

Prosecutors said the 33-year-old ripped off Microsoft Corp. by manufacturing 28,000 counterfeit discs with the company’s Windows operating system on them. He was convicted of conspiracy and copyright infringement, which brought a 15-month prison sentence and a $50,000 fine.

In a rare move though, a federal appeals court has granted an emergency stay of the sentence, giving Lundgren another chance to make his argument that the whole thing was a misunderstanding. Lundgren does not deny that he made the discs or that he hoped to sell them. But he says this was no profit-making scheme. By his account, he just wanted to make it easier to extend the usefulness of secondhand computers — keeping more of them out of the trash.

The case centers on “restore discs,” which can be used only on computers that already have the licensed Windows software and can be downloaded free from the computer’s manufacturer, in this case Dell. The discs are routinely provided to buyers of new computers to enable them to reinstall their operating systems if the computers’ hardware fails or must be wiped clean. But they often are lost by the time used computers find their way to a refurbisher.

Lundgren said he thought electronics companies wanted the reuse of computers to be difficult so that people would buy new ones. “I started learning what planned obsolescence was,” he said, “and I realized companies make laptops that only lasted as long as the insurance would last. It infuriated me. That’s not what a healthy society should have.”

He thought that producing and selling restore discs to computer refurbishers — saving them the hassle of downloading the software and burning new discs — would encourage more secondhand sales. In his view, the new owners were entitled to the software, and this just made it easier.

The government, and Microsoft, did not see it that way. Federal prosecutors in Florida obtained a 21-count indictment against Lundgren and his business partner, and Microsoft filed a letter seeking $420,000 in restitution for lost sales. Lundgren claims that the assistant U.S. attorney on the case told him, “Microsoft wants your head on a platter and I’m going to give it to them.”
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In 2013, federal authorities intercepted shipments of 28,000 restore discs that Lundgren had manufactured in China and sent to his sales partner in Florida. The discs had labels nearly identical to the discs provided by Dell for its computers and had the Windows and Dell logos. “If I had just written ‘Eric’s Restore Disc’ on there, it would have been fine,” Lundgren said.

As a result of violating the copyright of Windows and Dell, Lundgren pleaded guilty to two of the 21 counts against him. But he believed that because the discs had no retail value and were seized before they were sold, he would not receive any prison time. His sentence was based on the financial loss involved.

Source: Electronics-recycling innovator faces prison for trying to extend computers’ lives