Microsoft v. Zamos (and Zamos v. Microsoft)

Amusing story in the Register about David Zamos, a Kent State chemistry student, who bought a discounted educational version of Microsoft Windows XP Pro and Office XP Pro at the school bookstore. He decided he didn’t want it, tried to return it but couldn’t, so he put his copies on eBay. We all know Microsoft monitors eBay vigilantly, so it wasn’t long before Zamos heard from Microsoft asking if the disks contained the label “not for retail or OEM distribution.” It did, but Zamos argued that he wasn’t doing either.

Microsoft sued, but Zamos got the upper hand when he countersued (acting as his own attorney), alleging “Microsoft purposely established and maintained a sales and distribution system whereby rightful rejection and return of merchandise that is substantially non-conforming is either impossible or practically impossible due to the ineptness of its employees, unconscionable policies malicious intent and deceptive practices.” Ouch (and not bad drafting for a non-lawyer!). Microsoft decided it wanted to drop the case, but Zamos refused, saying he wanted to push his countersuit. He demanded an apology and a few bucks to cover his Kinko copying/printing cost. We don’t know if he got that (the case settled under cloak of confidentiality), but I’m betting Zamos was happy with the outcome.

I wonder about the wisdom of Microsoft bringing a lawsuit over Zamos’ eBay sales. Perhaps Microsoft doesn’t want to set a precedent by ignoring such sales, and I’m sure they thought Zamos would cave when he got sued, but nevertheless I’m still having a tough time justifying their action on a cost/benefit basis.

This case also illustrates the challenges of software vendors like Microsoft engaging in price discrimination (cheaper software for students) in an era where resale is easy. I’m not complaining (I benefit from the discounts) but ultimately these practices may not be supportable in the eBay era. Alternatively, the more likely scenario is that software vendors will tighten up their license restrictions even further.

More details from the Akron Beacon Journal: story 1 and story 2.

(Thanks to Steve Middlebrook for calling my attention to this).

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