Microsoft Licensing Quandries – will someone please explain whether or not you can use Microsoft Windows Home for commercial business purposes?
This is not legal advice, but since I cannot seem to get a straight answer on this from BSA counsel, I am posting this with the hopes that someone out there in the internet world can answer this simple question for me – is it legal to use Windows Home 7 Premium for business (“commercial”) purposes (other than for commercial hosting services), or does that violate the End User Licensing Agreement (“EULA”)?
If it violates the EULA, then the end user is in breach of contract (or possibly has committed copyright infringement depending upon the relevant facts of the case and the law). This can create a problem if you are trying to negotiate the lowest settlement possible in a software audit investigation with the Software Alliance (BSA).
It has been the position of the BSA that Windows Home 7 CANNOT be used for business purposes, and that penalties should be paid, and the software should be deleted. It is my position that “Home” is more for marketing purposes (ex. what is the difference between “Home” and “Personal” software, and are these terms used just to help end users make a purchasing decision. This is not legal, do not rely on this. These are just general discussion and opening this up for debate as many companies could be impacted by this interpretation.
Say you run a software company that started in the year 2000. At that time, you had 10 computers in the company that you purchased from Best Buy, and these computers came pre-loaded with Microsoft Windows Home 7. Best Buy knew you were buying these for your business, and even helped you pick the best one for you. The charged your credit card (which incidentally used your corporate account with the name of the company “Superstar Software” all over it. You keep the receipts in the hands of the IT guy, and its her job to keep them in a safe place “in case we are ever audited.” Well, as the years go by, and after moving a few offices, and acquiring a company or two along the way “Archies Architect Software” and “Dangerous Eddie Engineering Co.” and incorporate their computers into the mix. The owners of these companies tell Superstar “yeah we paid for all this software we will just transfer it over to your company and as long as you use it per the license terms, you should be good. You don't have all the receipts for all the new computers and that includes no dated purchase reciepts for Windows Home 7 which you picked up some more copies of, and the Office products you also acquired.
“Fast forward 20 years later, the BSA (Business Software Alliance) comes knocking with a “letter” demanding that you engage in a voluntary audit. Wow, why did I get this letter you say? The software is all good and licensed here, we are not software pirates. But the IP lawyers for the Business Software Alliance say “yeah yeah we have heard all that before, just provide us with a detailed audit worksheet showing us every piece of software licensed on your company computers, servers, and laptops, and if you cannot provide that evidence, you are a software pirate and must pay us a ransom (er, I mean an “infringement fee”).
Upon turning over the results of the audit, it is learned that your are informed “ha ha, your Windows Home Premium Software (some of which you have proof for, and some of which you do not have proof for), is causing legal problems, and you going to have to pay infringement fees, and then delete the software, and then go buy new software after you pay us the fee we are demanding. If none of this goes according to our plans, we may sue you in federal copyright court where your legal damages could be millions of dollars.”
“You ask what the problem is because you purchased and have receipts for the Windows Home 7. Hark says the BSA collection lawyer – “the word HOME tells you all you need to know.” It cannot be used for generating money. You can only basically use it while surfing the internet on your software, or at least so goes the thought process. You are infringers, and officers and directors can be held liable for your missing receipts and for also exceeding the scope of the licensing terms. But isn't that a breach of contract? No, not to us it is not. It is willful copyright infringement time to pay a 3X MSRP multiplier and hefty attorney fees if you want to resolve this case, and if you want the settlement “confidential” that could cost even more.”
“But is this a valid legal position, or is it bullying and crossing the line into being a software troll? Well, to answer this question, I think you first need to understand what the terms of the MS Windows Home 7 license is. If it is allowed for commercial business or profit purposes (maybe you work from home and make profits, is that prohibited)? Again, you must turn to the terms of the license (see below). I see no such prohibition against business use, and do not consider such uses to be an infringement of copyright, or a breach of contract.”
“Counsel for BSA are unwilling to even read the terms of the contract with me, instead telling me dice and offering me OTHER LICENSE EULA's that don't even deal with the product at hand. I balk and say I cannot tell my Client to delete all that software because Microsoft doesn't want you using it for business, but they will not point to where exactly the commercial use prohibition is. Now, I saw it on the ‘Home and Student” version which makes clear on their licensing database that this CANNOT be used for commercial purposes, nevertheless, my Client gets strong-armed which appears to be a breach of contract being induced by the BSA who interferring with the terms of an existing contract, and tortiously interferring with prospective economic advantage by taking up value time and money to purse this position which is threatening to put the small out of business (often run by foreign nationals just here to try to live the American Dream) if the demands are not made.”
“Now is this fair? Do I not have a right to insist that we understand the terms of the EULA, and if my Client is compliant, to continue to allow them to use the software without paying a settlement fee and the BSA attorney fees (which can range from $2,500=-$10,000)? When I make these arguments, amazingly I am treated like the bad guy, and they are pushing us into a position where seeking declaratory relief and our attorney fees in federal court may be the only rational option available to my Clients who feel extremely bullied, and this cases also happens where there are simply “missing, lost, or mislaid receipts which cannot be dug up following years of running the business and years of mergers and acquisitions. Is not having every receipts for every piece of software a crime? Does it make you are software pirate? Should you have to destroy software you have legally acquired along the way because you don't have receipts on hand, or dated confirmations, or other invoice evidence. According to the BSA, its “hey too bad buddy, we need our money if you don't have receipts, and whether we agree with your EULA analysis or not. You better settle the case or you cold really be in for it. This is the general demeanor, and its not fair or objective at all and fails to take into account realities that people do lose receipts and they do acquire companies and their computers and they don't always have all the paperwork. In these cases, we call for fair treatment.”
Listen to Attorney Steve discuss “Lost receipts” in the software alliance and Autodesk cases
PODCAST: Click on the picture above to hear a podcast on this legal topic. If you like it share it with your friends.
Microsoft licensing terms – here is the entire EULA agreement I was able to find. If you can tell me where this prohibits business use I will kindly adjust my thought process on this issue:
MICROSOFT SOFTWARE LICENSE TERMS
WINDOWS 7 HOME PREMIUM
These license terms are an agreement between Microsoft Corporation (or based on where you live, one of its affiliates) and you. Please read them. They apply to the software named above, which includes the media on which you received it, if any. Printed-paper license terms, which may come with the software, may replace or modify any on-screen license terms. The terms also apply to any Microsoft
· updates, · supplements,
- · Internet-based services, and
- · support services for this software, unless other terms accompany those items. If so, those terms apply.By using the software, you accept these terms. If you do not accept them, do not use the software. Instead, return it to the retailer for a refund or credit. If you cannot obtain a refund there, contact Microsoft or the Microsoft affiliate serving your country for information about Microsoft's refund policies. See www.microsoft.com/worldwide. In the United States and Canada, call (800) MICROSOFT or see www.microsoft.com/info/nareturns.htm.As described below, using the software also operates as your consent to the transmission of certain computer information during activation, validation and for Internet-based services.If you comply with these license terms, you have the rights below for each license you acquire.
- Software. The software includes desktop operating system software. This software does not include Windows Live services. Windows Live is a service available from Microsoft under a separate agreement.
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- INSTALLATION AND USE RIGHTS.
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may change or cancel them at any time.
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- · Windows Update. To enable the proper functioning of the Windows Update service in the software (if you use it), updates or downloads to the Windows Update service will be required from time to time and downloaded and installed without further notice to you.
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- · Auto Root Update. The Auto Root Update feature updates the list of trusted certificate authorities. You can switch off the Auto Root Update feature.
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- · Windows Media Player. When you use Windows Media Player, it checks with Microsoft for
- · compatible online music services in your region; and
- · new versions of the player. For more information, go to go.microsoft.com/fwlink/?Linkid=104605.
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- · IPv6 Network Address Translation (NAT) Traversal service (Teredo). This feature helps existing home Internet gateway devices transition to IPv6. IPv6 is next generation Internet protocol. It helps enable end-to-end connectivity often needed by peer-to-peer applications. To do so, each time you start up the software the Teredo client service will attempt to locate a public Teredo Internet service. It does so by sending a query over the Internet. This query only transfers standard Domain Name Service information to determine if your computer is connected to the Internet and can locate a public Teredo service. If you
- · use an application that needs IPv6 connectivity or
- · configure your firewall to always enable IPv6 connectivityby default standard Internet Protocol information will be sent to the Teredo service at Microsoft at regular intervals. No other information is sent to Microsoft. You can change this default to use non-Microsoft servers. You can also switch off this feature using a command line utility named “netsh”.
- · Accelerators. When you click on or move your mouse over an Accelerator in Internet Explorer, any of the following may be sent to the service provider:
- · the title and full web address or URL of the current webpage,
- · standard computer information, and
- · any content you have selected.
If you use an Accelerator provided by Microsoft, use of the information sent is subject to the Microsoft Online Privacy Statement. This statement is available at go.microsoft.com/fwlink/?linkid=31493. If you use an Accelerator provided by a third party, use of the information sent will be subject to the third party's privacy practices.
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- · Consent to Update Infrared Emitter/Receiver. The software may contain technology to ensure proper functioning of the infrared emitter/receiver device shipped with certain Media Center-based products. You agree that the software may update the firmware of this device.
- · Media Center Online Promotions. If you use Media Center features of the software to access Internet-based content or other Internet-based services, such services may obtain the following information from the software to enable you to receive, accept and use certain promotional offers:
- · certain computer information, such as your Internet protocol address, the type of operating system and browser you are using, and the name and version of the software you are using,
- · the requested content, and
- · the language code of the computer where you installed the software.Your use of the Media Center features to connect to those services serves as your consent to the collection and use of such information.
- Use of Information. Microsoft may use the computer information, accelerator information, search suggestions information, error reports, and Malware reports to improve our software and services. We may also share it with others, such as hardware and software vendors. They may use the information to improve how their products run with Microsoft software.
- Misuse of Internet-based Services. You may not use these services in any way that could harm them or impair anyone else's use of them. You may not use the services to try to gain unauthorized access to any service, data, account or network by any means.
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OBTAINED FROM MPEG LA, L.L.C. SEE WWW.MPEGLA.COM.
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- · anything related to the software, services, content (including code) on third party Internet sites, or third party programs; and
- · claims for breach of contract, breach of warranty, guarantee or condition, strict liability, negligence, or other tort to the extent permitted by applicable law.It also applies even if
- · repair, replacement or a refund for the software does not fully compensate you for any losses; or
- · Microsoft knew or should have known about the possibility of the damages. Some states do not allow the exclusion or limitation of incidental or consequential damages, so the
above limitation or exclusion may not apply to you. They also may not apply to you because your country may not allow the exclusion or limitation of incidental, consequential or other damages.
- LIMITED WARRANTY. If you follow the instructions and the software is properly licensed, the software will perform substantially as described in the Microsoft materials that you receive in or with the software.
- TERM OF WARRANTY; WARRANTY RECIPIENT; LENGTH OF ANY IMPLIED WARRANTIES. The limited warranty covers the software for one year after acquired by the first user. If you receive supplements, updates, or replacement software during that year, they will be covered for the remainder of the warranty or 30 days, whichever is longer. If the first user transfers the software, the remainder of the warranty will apply to the recipient.To the extent permitted by law, any implied warranties, guarantees or conditions last only during the term of the limited warranty. Some states do not allow limitations on how long an implied warranty lasts, so these limitations may not apply to you. They also might not apply to you because some countries may not allow limitations on how long an implied warranty, guarantee or condition lasts.
- EXCLUSIONS FROM WARRANTY. This warranty does not cover problems caused by your acts (or failures to act), the acts of others, or events beyond Microsoft's reasonable control.
- REMEDY FOR BREACH OF WARRANTY. Microsoft will repair or replace the software at no charge. If Microsoft cannot repair or replace it, Microsoft will refund the amount shown on your receipt for the software. It will also repair or replace supplements, updates and replacement software at no charge. If Microsoft cannot repair or replace them, it will refund the amount you paid for them, if any. You must uninstall the software and return any media and other associated materials to Microsoft with proof of purchase to obtain a refund. These are your only remedies for breach of the limited warranty.
- CONSUMER RIGHTS NOT AFFECTED. You may have additional consumer rights under your local laws, which this agreement cannot change.
- WARRANTY PROCEDURES. You need proof of purchase for warranty service.
- United States and Canada. For warranty service or information about how to obtain a refundfor software acquired in the United States and Canada, contact Microsoft at
- · (800) MICROSOFT;
- · Microsoft Customer Service and Support, One Microsoft Way, Redmond, WA 98052-6399; or
- · visit www.microsoft.com/info/nareturns.htm.
- Europe, Middle East and Africa. If you acquired the software in Europe, the Middle East or Africa, Microsoft Ireland Operations Limited makes this limited warranty. To make a claim under this warranty, you should contact either
- United States and Canada. For warranty service or information about how to obtain a refundfor software acquired in the United States and Canada, contact Microsoft at
· Microsoft Ireland Operations Limited, Customer Care Centre, Atrium Building Block B, Carmanhall Road, Sandyford Industrial Estate, Dublin 18, Ireland; or
· the Microsoft affiliate serving your country (see www.microsoft.com/worldwide).
3. Outside United States, Canada, Europe, Middle East and Africa. If you acquired the software outside the United States, Canada, Europe, the Middle East and Africa, contact the Microsoft affiliate serving your country (see www.microsoft.com/worldwide).
- NO OTHER WARRANTIES. The limited warranty is the only direct warranty from Microsoft. Microsoft gives no other express warranties, guarantees or conditions. Where allowed by your local laws, Microsoft excludes implied warranties of merchantability, fitness for a particular purpose and non-infringement. If your local laws give you any implied warranties, guarantees or conditions, despite this exclusion, your remedies are described in the Remedy for Breach of Warranty clause above, to the extent permitted by your local laws.
- LIMITATION ON AND EXCLUSION OF DAMAGES FOR BREACH OF WARRANTY. The Limitation on and Exclusion of Damages clause above applies to breaches of this limited warranty.This warranty gives you specific legal rights, and you may also have other rights which vary from state to state. You may also have other rights which vary from country to country.
Here is a copy of the EULA for Office “Home and Student” version [Not the clear prohibition against commercial use]
As you can see, this DOES clearly spell out that you cannot use Windows Home and Student” for business purposes. If Microsoft wanted to be clear that no commercial use is not allowed for Windows Home 7, all they had to do was use the exact same language in the Windows Home 7 as they did in the Home and Student. Home and Student is abundantly clear:
First, here is a license tool fro MS that you can use to pull EULA terms. When I search for Office Home and Student 2010 here is what I get:
.MILITARY APPRECIATION SOFTWARE. You must be a “Qualified Military User” to license software marked as “Military Appreciation” edition. To be a Qualified Military User, in the United States of America, you must be an authorized patron of the Armed Services Exchanges in accordance with applicable U.S. Federal statutes and regulations. The software is not licensed for use in any commercial, non-profit, or revenue-generating activities. If the software is marked as “Military Appreciation” edition, you may only transfer this software in accordance with military exchange service policies and regulations.”
This seems to be the clear choice for anti-business use of software but this provision is not set forth in the EULA above. As such, Microsoft must not have indented that limitation in the Windows Home 7 software. So if this is true, perhaps the software trolls are not willing to have an honest intellectual debate about the role of the EULA in settlement agreements.
Bulletin Board comments on related topics regarding commercial use of MS products
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