This post I’m taking a break from my standard technical postings to discuss a disturbing discovery regarding a large corporation’s unauthorized software usage. By now many of you have heard via
Slashdot,
arstechnica,
Digg, or your local newspaper that
Winternals Software, the company I co-founded with Bryce Cogswell in 1996,
filed suit in Federal court against Geek Squad and Best Buy for illegal use of the Administrator’s Pak. What the press coverage to date might not have made clear is what Geek Squad and Best Buy did prior to approaching Winternals in October 2005 about a license to our software, what they continued to do after terminating licensing discussions in February 2006, and why we felt we had no alternative but to protect our software through the legal system. This is the first lawsuit Winternals has ever initiated, and we did not approach the decision lightly.
Best Buy acquired the Geek Squad several years ago and has grown the unit to a size of approximately 12,000 employees that analysts estimate will generate over a billion dollars of revenue this year alone. The Geek Squad provides system repair, data salvaging, and installation services in each of the Best Buy retail outlets and, for an additional significant fee, a 911 service that travels to customer homes to perform repairs on site.
The
Administrator’s Pak is a collection of powerful system utilities, including enhanced versions of Sysinternals Filemon and Regmon that work remotely and have log-to-file capability, that’s sold to individual systems administrators. The flagship tool is ERD Commander, a
Windows Preinstallation Environment (WinPE)-based recovery environment with a familiar Windows user-interface that is the latest generation of the original ERD Commander product we released in 1998 and upon which Winternals was built. While Windows includes a rudimentary unbootable system repair tool in the form of the Recovery Console, Microsoft has chosen not to provide an advanced unbootable system repair, diagnosis and recovery environment on par with ERD Commander. The BartPE freeware alternative that clones WinPE offers some of the functionality as ERD Commander, but is missing key features such as the System Restore Wizard, hotfix and Service Pack uninstaller, password changer, crash analyzer wizard, and integrated Registry editor.
As outlined in our Complaint and Motion for Temporary Restraining Order (which can be found, along with all other legal documents filed in the case, at
http://www.winternals.com/legal/), Best Buy and Geek Squad initially contacted us and said that a license was needed to come into compliance. Rather than focus on the degree to which Best Buy and Geek Squad had previously engaged in the unauthorized copying and use of our products, we entered negotiations for a software license and to establish a long-term business relationship. To educate their employees on the software and facilitate these negotiations, we even held a training session at our expense on the Administrator's Pak at their facilities in Minneapolis and offered an eminently reasonable software license for all Geek Squad employees. While surprised that they ultimately decided against a license, we were willing to go our separate way with the hope that they would someday change their mind.
However, after receiving information that Geek Squad employees continued to use ERD Commander frequently in repairing customers' computers we decided to investigate the situation on our own. The level of unauthorized copying and usage we’ve uncovered in our preliminary investigation is substantial and has apparently taken place over several years. Our evidence includes admissions by highly-placed current Geek Squad and Best Buy employees and interviews of many former employees. As alleged in the Complaint, we also found that Geek Squad employees across the country were still using unlicensed copies of our software to repair computers.
In the end we concluded that the only remaining option was to take legal action. Winternals has invested substantial time and capital in developing this software and believes that Geek Squad should not be permitted to allow its 12,000 employees to use unlicensed copies for free while generating substantial profits from those efforts. Our
press release provides a summary of the lawsuit and the court's action to date.
