Man jailed for selling counterfeit software on eBay

An Indiana man has been sentenced to 27 months in prison for selling more than $700,000 worth of counterfeit computer software on the eBay Internet auction site. Courtney Smith, 36, of Anderson, Ind., was sentenced today by U.S. District Judge Sarah Barker of the Southern District of Indiana for selling counterfeit computer software over the Internet in violation of criminal copyright infringement laws.

At today's guilty plea and sentencing, Smith admitted that he purchased counterfeit Rockwell Automation computer software through the eBay Internet auction site and then duplicated and resold the copyright protected software to other eBay users. Between March 6 and May 26, 2004, Smith sold counterfeit copies of Rockwell Automation software in 32 or more separate eBay auctions, receiving $4,149.97.

"Mr. Smith exploited eBay to sell hundreds of thousands of dollars worth of counterfeit software at drastically reduced prices, thereby illegally profiting on the back of the copyright holder," said Assistant Attorney General Alice S. Fisher. "The Department of Justice is committed to prosecuting individuals who exploit legitimate online auction sites to sell pirated software and commit other acts of fraud."

The case arose from a Department of Justice initiative to combat online auction piracy. FBI agents executed a search warrant at Smith�s residence in Anderson on Dec. 15, 2004, seizing numerous computers, CDs and other devices used to manufacture the counterfeit software and sell it on eBay.

Source:
Press Release

Written by: James Delahunty @ 29 Mar 2007 18:08

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26 comments

Ankoku

dang man, thats a lot of time for selling pirated software, I kinda feel this guys pain, I came across some student edition copies of Microsoft OneNote last year and my boss said I could have them, so I started selling them on ebay, but with this initiative I got shot down :-/ Stupid Licensing rules, oh well

29.3.2007 18:28 #1

Andrew691

These are the kind of people that the RIAA or MPAA or whoever should be going after, people who are making huge profits through piracy not people who dont even really have a clue that what they are doing is illegal. They sue how many people every year? and how many of them are actually causing any damage to the recording industry? then theres people like this guy who are making $100,000's of $$$ off other peoples work and yet he hasnt been caught until now. That is very messed up.

30.3.2007 02:48 #2

ZippyDSM

how can 700K spring from 4K?
0_o
it boggles the mind.

30.3.2007 02:50 #3

Mr_Pink

30.3.2007 08:03 #4

simpsim1

Just to say ditto to the last comment. If you stick your hand in the fire deliberately, you deserve to get it burnt.

30.3.2007 08:38 #5

Whitfield

Have to admit that I agree with last 2 posts--This guy is really stupid--Still don't like the idea of him in jail and many violent criminals on the street. I think he should be punished, but something more like fine, community service etc--he didn't hurt anybody really, they are just "making an example" of him so that others will think twice before trying to sell pirated stuff--Stupidity is what this guy is guilty of--Just my opinion--
Roger(whitfield)

30.3.2007 12:38 #6

duckNrun

he is guilty of a lot more than stupidity.

To say he is guilty of being stupid somehow implies that he didnt recognize that selling copies of software that he purchased (which was a copy to begin with!)

The people who buy $400 software for $69 on ebay are guilty of stupidy IF they think it's authentic. If they figure that it's copied, cracked or whatever then they too are guilty of much more than being stupid.

While I agree that vilent offenders need to be taken off the street I have to state that 27 months is really NOT a big amount of time to be doing.

The guy got what he deserves... maybe LESS than he deserves.

30.3.2007 19:47 #7

bhetrick

Originally posted by ZIppyDSM:how can 700K spring from 4K?
0_o
it boggles the mind.700k is what all the copies he sold would of legally cost to purchase.

31.3.2007 04:22 #8

RNR1995

I agree with Andrew691
This is exactly the kind of guy who should be fined or go to jail
I do not think jail time should be that long as we need the space for VIOLENT criminals!

31.3.2007 04:58 #9

qazwiz

Quote:Originally posted by ZIppyDSM:how can 700K spring from 4K?
0_o
it boggles the mind.700k is what all the copies he sold would of legally cost to purchase.that doesn't really have credence because eBay is an AUCTION site.

by definition an auction sells at the highest price all concerned were willing to pay so he was jailed for selling 4k worth of software that couldn't be sold at 700k... or it would have been sold at a higher price

lets see... 32 copies totaling 4k is 125 per copy still a horrendous amount for a single piece of software

and as for the two years he will serve (for federal, 27months will serve about two years, some states, like Illinois, could be less than a year) it is way less than a thief would get for grand larceny (of $4000)

If you are hungry and steal a bag of groceries worth over $100, the third time you could get life in prison

qazwiz is qazwiz everywhere. If you see me say HI!

31.3.2007 07:07 #10

S2K

Originally posted by Ankoku:dang man, thats a lot of time for selling pirated software, I kinda feel this guys pain, I came across some student edition copies of Microsoft OneNote last year and my boss said I could have them, so I started selling them on ebay, but with this initiative I got shot down :-/ Stupid Licensing rules, oh well\

What you were doing may be against ebay policy (actually it is not and you let yourself get bullied when other ebay sellers of used software have fought and gotten their auctions reinstated), but it wasn't illegal. If those one note copies were never installed you never agreed to a EULA.

EULAS are not ironclad either. They are like leases or any other contract. they may include assertions of rights by one party (say the software maker) that would not hold up in court. Many provisions of EULAs as well as misinterpretations by licensors have been thrown out of court. Indeed the federal government, a significant buyer of software, has fought interpretations of EULAs by software makers and won.

Originally posted by duckNrun:The people who buy $400 software for $69 on ebay are guilty of stupidy IF they think it's authentic. If they figure that it's copied, cracked or whatever then they too are guilty of much more than being stupid.That is a patenlty absurd statement. My group used to buy "used software" from the federal govenrment for a smaller fraction of the original cost than your example.

There are used books, dvds, cds -- and software -- sold legally every day for less than a 40:7 ratio of their original cost.

I have bought used software on ebay about two dozen times. On one occasion there was something suspect and returned fro refund. On the other occasions I was just a smart buyer -- and uncowed by FALSE and overreaching assertions of licenses restrictions.

The seller in this article seems to be a thief, but don't subscribe to or promote here the anti consumer and incorrect interpretations of copyright law by throwing in comments that copyright goods are either illegal to sell used or obviously pirate if at a fraction of original cost.

1.4.2007 07:57 #11

S2K

As a follow up to my comments take a look at this:

http://www10.mcadcafe.com/nbc/articles/v...rticleid=241486

Interesting "article." Seems from the article it is now illegal to sell used software in Germany.

But wait. hmmm. PRNewswire. Yes, you guessed it, this is a assertion of what happened -- written by one side in the case.

If instead you read this about the same case you realize this was not about either selling used or new in shrink software:
http://www.computerworld.com/action/arti...rticle_more_bot
It was solely about companies that bought multiple licenses and tried to sell the multiple licenses to individual buyers. (these are cheaper packages designed so you can install say 100 copied of the same software across your company network.)

this statement made int eh first article is false an a wild over-interpretation of what was a rather narrow decision: "The court found that usedSoft GmbH's practice of selling "used" software licenses to third parties had infringed upon copyrights held by Oracle Corporation"

1.4.2007 08:08 #12

bhetrick

edited...double post

Xbox 360 / Xtreme, Wii / Cyclowiz, PS2 / DMS4, Gamecube / Qoob, ass / hairy

1.4.2007 08:35 #13

bhetrick

Originally posted by ZIppyDSM:how can 700K spring from 4K?
0_o
it boggles the mind.Quote:700k is what all the copies he sold would of legally cost to purchase.Quote:that doesn't really have credence because eBay is an AUCTION site.

by definition an auction sells at the highest price all concerned were willing to pay so he was jailed for selling 4k worth of software that couldn't be sold at 700k... or it would have been sold at a higher price

lets see... 32 copies totaling 4k is 125 per copy still a horrendous amount for a single piece of software

and as for the two years he will serve (for federal, 27months will serve about two years, some states, like Illinois, could be less than a year) it is way less than a thief would get for grand larceny (of $4000)

If you are hungry and steal a bag of groceries worth over $100, the third time you could get life in prisonIt doesn't matter that Ebay is an auction site or not. The manufacturer of the software doesn't use Ebay as a reseller. They sell their software at a set price. The guilty just used Ebay to sell his pirated copies. No matter how much he made from the auctions, he should be responsible for what it would have cost to purchase the software legally. In this case it's $700,000.

Look at it this way... say I were to break in to a local Harley Davidson dealer and stole a motorcycle which sells for $25,000. I then take it and sell it on Ebay for $2500. I then get caught. Now, what should I be charged with.... stealing $25,000 or $2500?

Obviously it's going to be $25,000.

Xbox 360 / Xtreme, Wii / Cyclowiz, PS2 / DMS4, Gamecube / Qoob, ass / hairy

1.4.2007 08:36 #14

neurokasm

what a dumbass

1.4.2007 08:52 #15

rrmk37

I think over 2.5 years was a little to much for the crime.I know the total value was 700,000.00 but it was not a holdup and I see alot of people doing alot worse and getting a hell of alot less time.I find it kinda funny how quick you all seem to be to pass judgement on his time and crime.I bet if we were to look inside all the pcs on here that visit I bet would far surpass what he has or had.I can not think of the numbers of people on here to find copy software to do something that has a huge rebuttle as to who is right or wrong.I am not sticking up for him or picking on him how many here can say they never do anything wrong.Did he deserve to be caught yes,did he deserve that much time maybe not.If all you that have such high morals maybe you shouldnt have all that copy software you do to copy your backups(LOL)and buy your movies and take care of your movies then you wouldnt need to copy them.Only an opion people so dont pull out your bats and come looking for me. lol

1.4.2007 12:49 #16

simpsim1

I think the idea was to set an example. It's because it's such an easy crime to commit. Copyright theft in itself is one thing if it means getting something for nothing (Not that I'm advocating it, but it's that commonplace these days), but to then try to make a stack of cash out of that theft is plain foolhardy. These sentences may be harsh, but they're more designed as a deterrent than as a punishment in my opinion.

2.4.2007 14:46 #17

tr2

There is a big difference in used and pirated. If you sell a used computer or cd the copyright goes with it. Mass manufacture and sale of a single "license" is illegal and should be stopped. I do think the sentence is unjust and your right that prisons should be for violent crimes. The real treat is we get to pay @30,000 a year for a 4000 dollar non-violent criminal. Why not put him to work have him pay the software manufacturer 2x the money he stole and be done with it.

4.4.2007 22:53 #18

qazwiz

Originally posted by bhetrick:

Look at it this way... say I were to break in to a local Harley Davidson dealer and stole a motorcycle which sells for $25,000. I then take it and sell it on Ebay for $2500. I then get caught. Now, what should I be charged with.... stealing $25,000 or $2500?

Obviously it's going to be $25,000.AH! but that isn't what happened, he didn't break into Microsoft's warehouse and steal, he bought and copied. for your motorcycle analogy he bought the motorcycle at full price and then used his StarTrek replicator. thus far, there has been no law broken... you can get the patent of anything patented with the US government and follow the directions to make as many as you want... you just cannot sell them. You CAN give them away as long as you do not receive any money (not even postage and certainly not handling)

so while the guy broke the law, the company didn't lose a penny... someone who gets an openly auctioned item for $125 wouldn't be willing to pay anywhere near $5000 let alone $21,875.00 that the article claims each of the 32 copies was worth. (700k/32)

this is massive exaggeration to tear at your emotional heart strings, the bread and butter of the liberal mindset. you need to check your facts before believing ANYTHING you hear, read, or even see. the old chestnut, "look before you leap" comes to mind.

and remember, when you have a headache you don't have an Aspirin deficiency. you need to stop the cause not hide the symptom

qazwiz is qazwiz everywhere. If you see me say HI!

7.4.2007 21:41 #19

Mez

eBay is a dumping ground for marginaly leagle software (used). This usually goes for pennys on the dollor of list price. A student can not afford to purchase new leagle software but they can afford obsolite software for pennys on the dollar. The software houses are not losing any money. I am a programmer. I always buy used software to learn a new language. I will not pay sever thousand USD for something I can not make money on. If I learn the language build a demo and get client I buy current software for the big bucks. That software is written off as a business expense so it really does not come out of my pocket. Most of my used software never pays off but I can afford to waste $50 but not $2,000. As long as the discription is accurate stating the software is used and the technical support has expired there will be no complaints. I have never seen any software with a notice claiming you can't sell the software even if you have gone to a newer version. In these cases no one is going to take the sellers to court because there is no case and no one was hurt.

I think this must have been different. The software must have been completely illegal. The used software still has a valid licence. As long as no one else is using that license number it will not raise any issues when it is installed. Copies will have one license for multiple copies. Now it the day of the internet, the second copy using the same license number will raise a red flag. He was an easy target for goons.

I am not outraged that he went to jail. He was stupid and greedy. The gross inflation of the crime is SOP. Goons always inflate the crime as much as they can whether it is copywrites, drugs or anything else that can be hugely inflated.

11.4.2007 05:16 #20

qazwiz

Originally posted by Mez:
... As long as the discription is accurate stating the software is used and the technical support has expired there will be no complaints. I have never seen any software with a notice claiming you can't sell the software even if you have gone to a newer version. ....

... As long as no one else is using that license number it will not raise any issues when it is installed. Copies will have one license for multiple copies. Now it the day of the internet, the second copy using the same license number will raise a red flag. ....Where to start,
some licenses require the registration of the machine you use it on, uninstalling is not an option (as far as the license is concerned) that machine has the software forever. (yes you can uninstall the actual software but subsequent reinstall, on any machine but the first, is against the license)

this situation is why the uproar about the MAC address being hardwired into computers. software could change itself and it's installing CD to only work on the first installed machine

next, upgrades are reduced in price so they piggy-back to the original product. One cannot use the upgrade without legally continuing to use the original. thus selling the original after upgrading creates an illegal copy.

as for the lies, (you said gross exaggeration being SOP) the legal community has a rule that a liar cannot be trusted to tell the truth and so if you can prove that the witness has lied in the past then his testimony can be ignored by the jury, even if he is telling the truth now(the jury's call). but also, if he lied on any point now (reverified and allowed to recant but doesn't), then the entire testimony is supposed to be thrown out and not allowed to be used in the consideration of this (or any other) case

thus according to rules of procedure, when the industry claims 32 copies are worth $700k their testimony is supposed to be ignored, not only on the value, but also any other point that they have made. So if I was on that jury he would have been released for lack of evidence

12.4.2007 11:23 #21

janrocks

Quote:
thus according to rules of procedure, when the industry claims 32 copies are worth $700k their testimony is supposed to be ignored, not only on the value, but also any other point that they have made. So if I was on that jury he would have been released for lack of evidenceA very valid point.. Can they prove that the buyers of this pirate software would have paid for the original software at full price?

Probably not, so they can't claim any real financial loss.. He (the pirate) is only guilty of profiting by the total amount of money he has taken from buyers.. simple fraud.. If he clearly stated that the item was a copy, and burned/pirated by himself he would be clear of even that.. but would still be guilty of copyright infringement.

Another pirate who deserves all he gets.. unbelievable that some people are so stupid!! http://cgi.ebay.co.uk/265-xbox-back-up-g...1QQcmdZViewItem

irc.OFTC.net #debian-women .. Stuff Vista.. Stuff Micro$oft!!
The revolution has happened.. Now we just need to TELL people!

12.4.2007 11:44 #22

qazwiz

265 legal back-ups...

Yea, RIGHT!

qazwiz is qazwiz everywhere. If you see me say HI!

12.4.2007 12:25 #23

Mez

Yes, I agree the pirate did not truthfully advertise his product. I am sure a unhappy customer dropped the dime on him.

qazwiz, all the really expensive software I have used may hve the same license agreement but the key is different for each upgrade. The key can not be used more than x places at any given time. The hundred copies were over the x amount so something bad happened. Probably the software could not be installed.
I used the term marginally leagle because it uses the same implied license. The 20 pages of agreement no one reads probably spells out that you can't resell the software. In that case, the practice is not leagle at all but doesn't hurt anyone especially the software houses. It actually generates some business for them. Some really expensive software houses give away slightly crippled versions for free. MS and escpeially Borland would sell evaluation copies of the real thing for pennies on the dollar. These are ploys to generate interest. MS still does a huge business that way. I will be given a several K developement package for 'attending' a internet lecture and evaluating it. I am on the "whore list" and will do work for free software.

Quote:As far as as for the lies, (you said gross exaggeration being SOP) the legal community has a rule that a liar cannot be trusted to tell the truth and so if you can prove that the witness has lied in the past then his testimony can be ignored by the juryEbay keeps records, the "law" does not need to get their info from the pirate. I bet he might not know how much he actually sold. They lied just like the drug busts were they bust a billion dollars worth of H in the getto. They assume it is going to be cut 100 times and sold for some crazy price. They are all just big liers!

12.4.2007 15:05 #24

imamathematicalman (unverified)

Originally posted by rrmk37: I think over 2.5 years was a little to much for the crime.

Two and a quarter years.
2 years & 3 months
27 / 12 = 2.25

12.10.2012 17:20 #25

lisausartes

i am very concerned and frightened to buy things on ebay because ebay sells pirated software and stolen goods, stay well away from ebay, ebay looks like a criminal website.

12.1.2013 01:36 #26

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