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Eric Lundgren built the first “electronic hybrid recycling” facility in the United States, which turns discarded cellphones and other electronics into functional devices.
Known for building an electric car out of “garbage” that outlasts a Tesla, his company processes more than 41 million pounds of e-waste a year.
Lundgren has received international praise for slowing the stream of harmful chemicals and heavy metals into the environment, and counts IBM, Motorola and Sprint among clients grateful for his cheap refurbished products.
Unfortunately, Microsoft is not such big a fan of Lundgren’s work.
When he figured out how to recycle e-waste from China into “restore discs” used to reinstall Windows software onto crashed hard drives, Microsoft took him to court, claiming he cost the company millions of dollars in lost sales.
Lundgren argues he hasn’t cost Microsoft any sales, as the company provides restore disks for free with software purchases, but many buyers lose or throw them away.
Microsoft also provide free downloads to restore the software to licensed customers online, but many customers don’t know that’s an option, and end up throwing the computer away as a result.
Lundgren made 28,000 of the discs and shipped them to a broker, who planned to sell them to computer refurbishing shops for about 25 cents each, so they could provide them to used-computer buyers.
Microsoft’s lawyers valued the discs at $25 each and said they represent $700,000 in potential sales.
Lundgren pleaded guilty but argued that the value of his discs to Microsoft was zero, as Microsoft, nor any computer manufacturers, sell them. He also explained that the discs could only be used to restore the software to computers already licensed for it. The licenses are good for the life of the computer.
The real loss to Microsoft was in the potential sale of new computers and new software licenses.
A federal appeals court sentenced Lundgren to a 15-month prison term and a $50,000 fine on April 11.
“This is a difficult sentencing,” U.S. District Judge Daniel T.K. Hurley told Lundgren, “because I credit everything you are telling me. You are a very remarkable person.”
“I got in the way of their agenda,” Lundgren told the L.A. Times, “Microsoft’s profit model is way more profitable than I could ever be.”
Prosecutors told Lundgren he could have a couple of weeks to put his financial affairs in order, including plans for his company of more than 100 employees.
“But I was told if I got loud in the media, they’d come pick me up,” Lundgren said. “If you want to take my liberty, I’m going to get loud.”
“I am going to prison, and I’ve accepted it,” Lundgren said Monday. “What I’m not OK with is people not understanding why I’m going to prison. Hopefully my story can shine some light on the e-waste epidemic we have in the United States, how wasteful we are.