This e-waste evangelist got into a battle involving Microsoft — and is going to prison for it

Recycling entrepreneur pleaded guilty, sentenced for copyright infringement dealing with computer discs

Recycling entrepreneur Eric Lundgren scatters computer discs onto the floor of his warehouse in Southern California. (Kim Brunhuber/CBC)

Eric Lundgren lifts a cardboard box over his head and dumps out the contents. Hundreds of computer discs cascade onto the floor of his warehouse on the outskirts of Los Angeles.

Lundgren, an e-waste evangelist, says the discs he's dumping on the floor were meant to save thousands of laptops from the landfill. Instead, they landed him in the middle of a court fight involving a tech titan and, ultimately, in prison after he pleaded guilty to conspiring to traffic in counterfeit goods and criminal copyright infringement.

"I fought this battle as long and as hard as I could," Lundgren says. "But I'm fighting a giant. And ... there's no winning when you go up against Microsoft."

Lundgren is a 33-year-old recycling entrepreneur. Every year, the company he founded, iT Asset Partners, buys about 19 million kilograms of old electronics and recycles them.

Lundgren's company buys about 19 million kilograms of old electronics annually and recycles them. (Kim Brunhuber/CBC)

At one of the company's facilities in Chatsworth, about 40 kilometres northwest of Los Angeles, Lundgren strides down the warehouse aisles, pointing this way and that.

"These are all computer electronics here, these are servers over here, you have some television sets that are going to be dismantled," Lungren says. "Every single part of these we're going to save."
On the disassembly line

On shelves and inside boxes, there are what looks like bits and pieces of every discarded computer that's ever been built. A little further away, five men have formed a disassembly line, where they crack open old computers to salvage usable parts and extract valuable metal.

"Most of the corporations want you to use a gadget or gizmo for one to two years and then toss it, throw it away," Lundgren says. "I don't believe in that."

To make his point, he picks up a used Dell laptop.

"This is a perfectly good working laptop," he says and points to a sticker on its underside.

A sticker indicates this Dell laptop has a Microsoft licence. (Kim Brunhuber/CBC)

"It's got a licence right there. As you can see, you're allowed to reload Windows 7 on this device. Now this laptop — we're going to be selling [for] $50. It doesn't make sense to pay for a new licence."

Lundgren's battle centres around so-called "restore discs:" a CD given to computer buyers containing software to restore a Windows operating system to its original state. Buyers can also download the software directly from Microsoft. Both are free, and crucially, the discs can only be used on a computer that already has a valid Windows licence.

In 2011, Lundgren's factory in China made 28,000 restore CDs to be used with old Dell laptops, each reprinted with the Dell and Microsoft logos on top of the discs.
Recycling 'worthless' discs

He says he was going to sell the discs to computer refurbishers for 25 cents each to allow buyers of a used laptop with a legal Microsoft licence to fix their operating system if it crashed instead of throwing away the computer.

"I recycle millions of restore CDs because they're worthless," Lundgren says, as he continues to dump the discs onto his warehouse floor. "But apparently the government thinks they're worth something."

Federal authorities intercepted the Dell restore discs in 2012 and valued them at $8.3 million. They also raided his home.

Restore discs are given to computer buyers containing software to restore a Windows operating system to its original state. (Kim Brunhuber/CBC)

"The first time I knew that there was any problem [was] when armed guys with guns and masks stormed my house," Lundgren says.

Federal prosecutors accused him of criminal copyright infringement and Microsoft experts testified in court that the discs were worth $25 each. Lundgren pleaded guilty to conspiring to traffic in counterfeit goods and criminal copyright infringement, was fined $50,000 and sentenced to 15 months in prison. The sentence was affirmed by the United States Court of Appeals for the 11th Circuit in Miami last month.

When contacted for comment, Microsoft declined an interview and pointed to a blog post on the company's website that stated it was U.S. Customs and not Microsoft behind the case against Lundgren, a man the company says "set up a large counterfeit operation in China and intended to profit from his actions."

Microsoft said Lundgren "failed to stop after being warned" and "went to great lengths to mislead people."

His emails "submitted as evidence before the court make clear that Mr. Lundgren's motivation was to sell counterfeit software to generate income for himself," says the blog post written by Frank Shaw, Microsoft's corporate vice-president of communications.
Coming together to beat e-waste

Lundgren says the court ruling is a victory for big companies that do all they can to persuade consumers to use gadgets for a year or two and then toss them away.

"Refurbishers are going to start not refurbishing these low-end products, Lundgren says. "And if they don't ... they're going to go into landfills."
Off to prison

On June 15, he'll head to a federal prison in Oregon. Ever the recycler, he finds a certain beauty and function even in this.

"Now I've become an e-waste martyr," Lundgren says. "The beautiful thing about that is it's going to bring awareness to the thing that I've been fighting for my entire life. But I need the world to stand up and say: 'No, that's not right. This is our product. We own this product and we have the right to do with it as we choose.' "

Lundgren opens another box of restore CDs and begins to empty it, adding to an already impressive pile forming beneath his feet. Recently he bought these CDs — 40,000 of them — from a laptop maker for less than five cents each, as a dramatic and symbolic gesture of how little value they hold.

Lundgren says if low-end products aren't refurbished, they will end up in landfill sites. (Kim Brunhuber/CBC)

"Here's the fun thing of what I'm doing with these: I'm sending every one of these to the judge one box at a time, saying: 'Here, have them for free.' "

It's a message to the man who sent him to prison, he says, for basically nothing.

"Because they are physically worthless," Lundgren says. "They're basically plastic."

He shakes the last of the thousands of restore CDs onto the floor and makes his way over the shifting pile back to firm ground.