Believe or not, this isn't just cut and paste. I've tried to boil down a lot of stuff.

According to the RIAA:

"Each year, the [music] industry loses about

               $4.2 billion

to piracy worldwide – 'we estimate we lose millions of dollars a day to all forms of piracy.'"

So the recording industries secretely foist root kits on our computers that disable the operating systems and make our computers vulnerable to other malicious invasion, make "copy protected" CDs and DVDs that won't play in common playback devices, have been accused, with some credible evidence, of deliberately spreading malware to "break" websites and FTP operators they "think" may be involved in illegal distribution, have filed several hundred lawsuits in the US alone against individuals, and vigorously lobby for new laws to "protect them" and "screw the public."

We understand the RIAA concern. We can shed a small tear for them.



According to the most recent Global Software Piracy Study by the Business Software Alliance (.pdf 900KB):, 36% of the software installed on computers worldwide in 2003 was pirated, representing a loss of

               $29 billion.

(6.9 times the loss claimed by the RIAA – just for some perspective)

Thirty-five percent of the software installed on personal computers worldwide was pirated in 2004, a one percentage point decrease from 36 percent in 2003. Yet, losses due to piracy increased from $29 billion to

               $33 billion.

The Business Software Alliance (BSA) estimates that 29% of all software installed in the UK last year is illegal in some way. That is an estimated loss to the software industry of

               $1.963 billion from the UK alone.

(46.74% of what the RIAA claims to lose worldwide)

The US does a bit better, at only 21% pirated, but the larger base of users gives a loss for 2004 of

               $6.645 billion from the US.

(1.5821 times the total global RIAA loss claimed)

International Data Corporation (IDC), "the information technology (IT) industry's leading global market research and forecasting firm."(?) and the Business Software Alliance estimate:

"Globally, businesses and consumers will spend more than $300 billion on PC software over the next five years, according to IDC estimates. Given the current piracy rates, IDC predicts that, during the same five-year period, almost $200 billion worth of software will be pirated."

This is not just a "business" problem. Since software pirates don't pay taxes:

"In an April 2003 economic impact study conducted for BSA, IDC concluded that lowering piracy by 10 percentage points over four years would add more than one million new jobs and $400 billion in economic growth worldwide. As the software industry becomes bigger, those benefits increase."

(Worldwide growth in new software installations is estimated at around 5 - 7% or so. Growth in China is now running at about 15%.)

Although Microsoft isn't the whole industry by quite a bit, it's interesting what Microsoft has done.

They have issued a "clarification" of a ten year old EULA pointing out that the license to install their OEM OS (and Office programs) is, as it has always been, a license to use the OS on ONE MACHINE. The license is not transferable to a different machine than the one on which is first installed.

They have, almost incidentally, issued what amounts to a clarification of what they mean by ONE MACHINE, to say that an upgrade by replacement of the motherboard, other than as a like-kind repair, constitutes "making a new machine."

They have had the temerity to ask, politely, that people requesting software updates verify that they have a valid license for the copy of the OS in use.

You can decline the verification process, and if you do decline to validate they give you the Critical Updates anyway.

If you proceed with the verification, and there is a problem with confirming the validity of your licences, they suggest that you clean up your ownership, and they give you the Critical Updates anyway.

True, they have warned that they may cease giving out updates for pirated copies; but that warning is at least ten years old – since the first day WinXP hit the streets.

Microsoft has filed (last count) about 72 lawsuits for illegal distribution worldwide. So far as has been reported, all of these were against "Factory Counterfeiting" operations, or large scale sellers, and NONE have been filed against individual users.

The notice that you can't do a motherboard upgrade under the existing OEM EULA is apparently nothing but a "friendly warning" to a few (small?) OEMs who have been selling upgrades (essentially making new computers) without licensing a new OS as they have always been required to do under the OEM EULA. This is INSTEAD OF SUING THEM FIRST like the RIAA likely would have done.

The original article that instigated this rather specious bit of hand-wringing specifically refers to the OEM EULA. OEM builders get a substantial discount on what they pay for the OS and other software, on the condition that the license is for making ONE MACHINE and the licensed software is for use ONLY ON THAT SINGLE MACHINE.

My EULA, and OEM license installed with file date 08/28/2001, includes:
[quote]
* Software as a Component of the Computer - Transfer. THIS LICENSE MAY NOT BE SHARED, TRANSFERRED TO OR USED CONCURRENTLY ON DIFFERENT COMPUTERS. The SOFTWARE is licensed with the HARDWARE as a single integrated product and may only be used with the HARDWARE. If the SOFTWARE is not accompanied by new HARDWARE, you may not use the SOFTWARE. You may permanently transfer all of your rights under this EULA only as part of a permanent sale or transfer of the HARDWARE, provided you retain no copies, if you transfer all of the SOFTWARE (including all component parts, the media and printed materials, any upgrades, this EULA and the Certificate of Authenticity), and the recipient agrees to the terms of this EULA. If the SOFTWARE is an upgrade, any transfer must also include all prior versions of the SOFTWARE.
[end quote, bold added]

I do not know whether the retail "shrink-wrap" software contains the same or similar restrictions, and apparently neither does anyone else here. So far as I can see, no one has said that the "new conditions" apply to anything except the OEM version EULA. The agreement that came with your software should be on your hard drive, probably with filename "EULA.txt."

Note that you may have several files with this same name: probably separate ones for your OS and, if you have it, for Office (or for each individual Office program if you acquired them that way). Many other programs may use the same filename for their EULA. Some OEM builders add their own EULA, but it is IN ADDITION TO the Microsoft EULA.

To see what applies to your version, RTFM.

John