Microsoft OEM Licensing FAQ

Discussion in 'Operating Systems' started by SJConsultant, Mar 27, 2005.

Thread Status:
Not open for further replies.
  1. SJConsultant

    SJConsultant 2[H]4U

    Messages:
    3,626
    Joined:
    Jan 14, 2004
    There are alot of misconceptions and misinformation surrounding Microsoft OEM software licensing and what is legal according to the terms of the EULA. This FAQ will be dealing strictly with the Microsoft OEM licenses for Operating Systems such as Windows XP, Windows Server, etc. Please note that OEM applications such as Microsoft Office are not within the scope of this FAQ.

    The information presented is taken directly from Microsoft’s OEM website. For most of you who are reading this, the links provided require registration before you can browse them. Since software licensing is a legal grey area, this FAQ is to provide readers with information to how OEM licensing is supposed to work.

    Purchasing an OEM license.

    Microsoft’s OEM licensing comprises of *two* EULAs, the first being the sellers and the second is the end user. The seller’s EULA has specific requirements in which they must follow in order to legally sell an OEM license to a customer.

    OEM OS included as part of a new computer system.

    Any vendor selling a computer with an OEM OS is required to “pre-install” the Operating System in such a way the end user who receives the computer system can complete the OOBE (Out of box experience).

    Quoted from Microsoft's OEM Builder FAQs:

    “Q. What is the OPK and why do I have to use it?

    A. System Builders who distribute Windows software on a fully assembled PC must preinstall the software on the PC's hard drive using the OEM pre-installation kit (OPK) included in the OEM System Builder Pack.

    Preinstallation using the OPK ensures customers can experience the intended "Windows Out of Box Experience" or OOBE and they receive the opportunity to accept the EULA.

    Additionally, the OPK is easy to set up and use and will save you time versus manual installation. It enables you to add shortcuts and branding of your business to the operating system, enables you to test preinstalled PCs without interrupting the preinstallation process, and much more.

    For more information on the OPK, please see https://oem.microsoft.com/script/contentpage.aspx?pageid=512592"

    OEM OS sold separately.

    Another way in which a user can obtain an OEM copy of Windows is by simply purchasing it from a vendor. The vendor must still follow the “sellers” EULA when selling a single copy of the OS. The EULA states the vendor must sell the OS bundled with a “non-peripheral component” that is “essential” to running the PC. Microsoft has a FAQ on this as well:

    Quoted from Microsoft's OEM Builder FAQs:

    "Q. The current System Builder license states that I may distribute an operating system license with a "non-peripheral hardware component". What hardware components are considered "non-peripheral"?

    A. A non-peripheral hardware component is a hardware component that is considered to be essential to running a computer system, and includes components such as memory, internal devices and drives, mice, keyboards, and power supplies. Examples of components that are not considered essential are external modems, networking devices, cameras, printers, and scanners. "

    Vendors selling "COAs"

    Quoted from EULA.TXT located on any generic OEM installation.

    "END USER PROOF OF LICENSE. If you acquired the SOFTWARE on a device, or on a compact disc or other media, a genuine Microsoft "Proof of License" COA label with a genuine copy of the SOFTWARE identifies a licensed copy of the SOFTWARE. To be valid, the label must be affixed to the COMPUTER, or appear on the SOFTWARE packaging. If you receive the label separately, it is invalid. You should keep the label on the COMPUTER or packaging to prove that you are licensed to use the SOFTWARE."

    Buyer beware, vendors selling standalone COAs (Certificate of Authority) are not legal! Microsoft does not provide COAs as a “standalone” item that can be bought. The only legal way to obtain a COA is by purchasing a legal copy that comes with the hologrammed disk and COA.

    Quoted from Microsoft's OEM Builder FAQs:

    "Q. I see products like Win XP Pro — COA only — advertised for sale. Is this legal?

    A. Offers to distribute incomplete OEM System Builder software packages are not legal. Under no circumstances are System Builders or any other vendors authorized to distribute single OEM System Builder software components such as stand-alone certificates of authenticity (COAs).

    Please note that the Certificate of Authenticity included with each OEM System Builder software package authenticates only the software components with which it is legally distributed. As mentioned, any offer to distribute an incomplete Microsoft software package (i.e. COA only) is not authorized, and any individual who was to obtain incomplete Microsoft software components would not be authorized to use the associated software or redistribute the components. For OEM System Builder Windows desktop operating system product, the complete software package must include the COA, hologram CD, and manual(s).

    If you are aware of, or have suspicions of piracy concerning Microsoft software, we urge you to send an e-mail to piracy@microsoft.com or visit www.microsoft.com/piracy/reporting.

    Additionally, we recommend acquiring Microsoft OEM software from an authorized Microsoft OEM distributor or associate — an assured source of genuine Microsoft software."

    OEM “marriage” and license restrictions

    OEM licensing has certain restrictions as to what you can and cannot do according to the terms of the EULA that you accept during installation.

    Q. What computer component ties the OEM license to the computer?

    A. Short answer – the first motherboard the OS was installed on. In the case of your purchase of an OEM license with a new computer, this license is tied to the motherboard of that system. In the case of a purchase of OEM software from a retail seller, this would be the first motherboard you install the software on, *not* the “hardware” that was bundled with your OEM purchase.

    Quoted from Microsoft's OEM Builder FAQs:

    "Q. Can a PC with OEM Windows XP have its motherboard upgraded and keep the same license? What if it was replaced because it was defective?

    A. Generally, you may upgrade or replace all of the hardware components on your customer's computer and the end user may maintain the license for the original Microsoft® OEM operating system software, with the exception of an upgrade or replacement of the motherboard. An upgrade of the motherboard is considered to result in a "new personal computer" to which Microsoft® OEM operating system software cannot be transferred from another computer. If the motherboard is upgraded or replaced for reasons other than a defect, then a new computer has been created and the license of new operating system software is required. If the motherboard is replaced because it is defective, you do NOT need to acquire a new operating system license for the PC.

    The reason for this licensing rule primarily relates to the end-user license agreement (EULA) and the support of the software covered by that EULA. The EULA is a set of usage rights granted to the end-user by the PC manufacturer and relates only to rights for that software as installed on for that particular PC. The System Builder is required to support that license the software on that individual PC. Understanding that end users, over time, upgrade their PC with different components, Microsoft needed to have one base component "left standing" that would still define that original PC. Since the motherboard contains the CPU and is the "heart and soul" of the PC, when the motherboard is replaced (for reasons other than defect) a new PC is essentially created. The original System Builder, therefore, can not be expected to support this new PC that they in effect, did not manufacture."

    Transfer of an OEM License

    The next restriction comes with transferring the license. OEM software that has already been used, installed, activated, etc is not transferable unless you transfer the entire computer along with the software to another party.

    Quoted from Microsoft's OEM Builder FAQs:

    "Q. Can my customers transfer or sell their OEM software licenses?

    A. After an OEM software license has been installed on a PC, the license may not be installed on or transferred to another PC. However, the entire PC may be transferred to another end user along with the software license rights. When transferring the PC to the new end user the software media, manuals (if applicable) and certificate of authenticity label must be included. It is also advisable to include the original purchase invoice or receipt. The original end user cannot keep any copies of the software.

    The end user license agreement (EULA) is granted to the end user by the System Builder and relates to the license on the PC with which it was originally distributed. Because the System Builder is required to support the license on that original PC, a System Builder can not support a license that has been moved from a PC they manufactured to one that they did not. This is one of the key reasons why an OEM System Builder license can’t be transferred."

    Quoted from Microsoft's OEM Builder FAQs:

    "Q. My customer bought a new PC and wants to move their OEM software from the old PC to the new one. Can't they do whatever they want with the software?

    A. The software is licensed with the computer system on which it was originally installed and is tied to that original machine. OEM licenses are single-use licenses that cannot be installed on more than one computer system even if the original machine is no longer in use. The end user license agreement (EULA) accepted by the customer before they use the software, states that the license may not be shared, transferred to or used concurrently on different computers. The System Builder is required to provide end-user support for the Windows license. A System Builder can not support a license that has been moved from a PC they manufactured to one that they did not — this is a fundamental reason why OEM System Builder licenses can't be transferred."

    Product Activation and OEM software

    Recently Microsoft has changed their policies in regards to product activation for their OEM Operating Systems. Remember the FAQ about COAs? This is probably the major reason why Microsoft has changed their policies. COAs that normally should have been used on new PCs by OEMs were being sold on the internet.

    This change only affects the top 20 OEMs who provide “BIOs locked” CDs with new computer systems. You will not be asked to call Microsoft if you use your recovery disks properly and with the machine it is intended for.

    However, if you attempt to use the keycode on the name brand computer’s COA with an OEM disk, then you *will* be asked to activate by telephone to answer a few key questions before the Microsoft representative issues a new activation code.

    From all information I have gathered so far, Microsoft will eventually extend this policy to all OEMs who provide “bios locked” recovery disks. This policy will not affect smaller OEMs who provide the original OEM disks to the customer and the customer will be able to activate as over the internet as normal.

    Product Support for OEM Software

    PRODUCT SUPPORT. Support for the SOFTWARE is not provided by MS, Microsoft Corporation, or their affiliates or subsidiaries. For SOFTWARE support, please refer to Manufacturer's support number provided in the documentation for the HARDWARE. Should you have any questions concerning this EULA, or if you desire to contact Manufacturer for any other reason, please refer to the address provided in the documentation for the HARDWARE.

    Basically OEM copies receive no support directly from Microsoft. Rather you must refer to your place of purchase for support *if* they provide such support. Please note that support *generally* comes from smaller OEMS who provide the software bundled with a computer.

    Miscellaneous

    "1-2 CPU" labeling

    Some copies of Windows XP have labeling such as "1-2 CPU", this labeling has caused some confusion and misconceptions about what "1-2 CPU" stands for. I direct you to the following excerpt directly copied from the EULA.TXT on any *generic* Windows XP machine:

    "Installation and use. You may install, use, access, display and run one copy of the SOFTWARE on the COMPUTER. The SOFTWARE may not be used by more than two (2) processors at any one time on the COMPUTER, unless a higher number is indicated on the COA.

    The above statement is clear in that the labeling of "1-2 CPU" means the number of processors on a *single* computer and not that you can install the same copy on two different computers.

    Backup Copies

    "Back-up Copy. YOU MAY MAKE A SINGLE BACK-UP COPY OF THE SOFTWARE. YOU MAY USE ONE (1) BACK-UP COPY SOLELY FOR YOUR ARCHIVAL PURPOSES AND TO REINSTALL THE SOFTWARE ON THE COMPUTER. EXCEPT AS EXPRESSLY PROVIDED IN THIS EULA OR BY LOCAL LAW, YOU MAY NOT OTHERWISE MAKE COPIES OF THE SOFTWARE, INCLUDING THE PRINTED MATERIALS ACCOMPANYING THE SOFTWARE. YOU MAY NOT LOAN, RENT, LEASE, LEND OR OTHERWISE TRANSFER THE CD OR BACK-UP COPY TO ANOTHER USER"

    The above statement means you can make one backup copy for archival purposes. I along with others suggest that you make this backup copy and *use* the backup copy as your primary media thus saving the original media from being scratched or damaged. If the backup is damaged, then you can simply destroy the damaged copy and make another backup from the original media.

    "Downgrade Rights"

    Use of Previous Version Of SOFTWARE. If the COA which accompanies the HARDWARE identifies the SOFTWARE as Microsoft Windows XP Professional SOFTWARE, then in lieu of installing and using Microsoft Windows XP Professional SOFTWARE, you may install, use, access, display and run the same language version of ONE (1) of the following versions: Microsoft(R) Windows(R) 2000 Professional, Microsoft(R) Windows(R) NT Workstation version 4.0 or Microsoft(R) Windows(R) 98 (Second Edition) ("Downgrade Software") on the COMPUTER, provided (1) you agree that Downgrade Software support will NOT be provided hereunder by Manufacturer, MS or Microsoft Corporation, their affiliates or subsidiaries; (2) you agree that neither Manufacturer, MS nor Microsoft Corporation are obligated to provide you with the Downgrade Software or media; (3) you may not loan, rent, lease, lend or otherwise transfer the CD or back-up copy of Microsoft Windows XP Professional to another end user, except as otherwise provided in the transfer provisions of this EULA; and (4) such Downgrade Software shall be deemed "SOFTWARE" for the purposes of this EULA and use of the Downgrade Software shall be in compliance with all the terms of this EULA, except that, with respect to Microsoft Windows 98 (Second Edition), your Connection Maximum shall be limited to five (5) Devices. If you exercise the downgrade rights granted herein, you may install, use, access, display and run the Microsoft Windows XP Professional SOFTWARE, provided (1) you remove the Downgrade Software from your hard drive; (2) you do not loan, rent, lease, lend or otherwise transfer the CD or back-up copy of Downgrade Software to another end user, except as otherwise provided in the transfer provisions of the EULA for the Downgrade Software; and (3) such Microsoft Windows XP Professional SOFTWARE shall be deemed "SOFTWARE" for the purposes of this EULA and use of the Microsoft Windows XP Professional SOFTWARE shall be in compliance with all of the terms of this EULA. If the COA which accompanies the HARDWARE identifies the SOFTWARE as either Windows XP Tablet PC Edition or Windows XP Media Center Edition 2004 then no downgrade rights are granted herein.

    Basically the above statement means if you buy license for Windows XP Professional for a new computer and have software that cannot run on Windows XP Professional due to age or incompatibility reasons, then you may install and use an older version such as Windows 98SE, NT4,or 2000 Professional. This downgrade right does not grant you permission to concurrently use the Windows XP Professional and the older Windows software at the same time. Once your software application has been made compatible with Windows XP Professional, you may then wipe out the old version of Windows and install the XP Pro License.

    Windows XP Upgrades

    UPGRADES. If the SOFTWARE is labeled as an upgrade, you must be properly licensed to use a product identified by MS or Microsoft Corporation as being eligible for the upgrade in order to use the SOFTWARE ("Eligible Product"). For the purpose of upgrade(s) only, "HARDWARE" shall mean the computer system or computer system component with which you received the Eligible Product. SOFTWARE labeled as an upgrade replaces and/or supplements (and may disable, if upgrading a Microsoft software product) the Eligible Product which came with the HARDWARE. After upgrading, you may no longer use the SOFTWARE that formed the basis for your upgrade eligibility (unless otherwise provided). You may use the resulting upgraded product only in accordance with the terms of this EULA and only with the HARDWARE. If the SOFTWARE is an upgrade of a component of a package of software programs that you licensed as a single product, the SOFTWARE may be used and transferred only as part of that single product package and may not be separated for use on more than one computer.

    If you purchase an upgrade version of Windows XP and use an older version of Windows to "qualify" the upgrade, then you are no longer allowed to use the older version of software on any other computer.

    NFR Versions

    NOT FOR RESALE SOFTWARE. SOFTWARE identified as "Not For Resale" or "NFR," may not be sold or otherwise transferred for value, or used for any purpose other than demonstration, test or evaluation.

    Self explanatory. Anyone selling "NFR" or "Not for Retail" sale software are making money on software they originally received for *FREE*. So in reality they are taking advantage of people's lack of understanding of licensing to make a quick buck.


    Questions and constructive comments are welcome.

    Last Update 08/12/2005
     
  2. lomn75

    lomn75 Purple Ace

    Messages:
    6,678
    Joined:
    Jun 26, 2000
    Looks good. Might be nice to have the "Too Lazy To Read" summary such as:

    • Personal purchase of OEM software is fine.
    • Said purchase requires real hardware -- Newegg's power cable splitter does not qualify.
    • COAs without discs are not legitimate.
    • OEM licenses cannot be transferred to new systems.
    • Motherboard replacement constitutes a "new system."
    • If you're shafted with a lousy mobo or the like, explaining to MS will almost certainly get official permission to transfer the license (See HTPC_Rookie below)
    • However, the whole thing (hardware + software) can be transferred as a unit.
     
  3. SJConsultant

    SJConsultant 2[H]4U

    Messages:
    3,626
    Joined:
    Jan 14, 2004
    Noted.

    As for the upgrading, you can upgrade everything except the motherboard. Once you replace or upgrade the motherboard, MS considers it a "new" computer, *unless* you are replacing a defective motherboard with the *same* make and model.
     
  4. Phoenix86

    Phoenix86 [H]ardness Supreme

    Messages:
    6,658
    Joined:
    Mar 28, 2002
    What about the odd exceptoin where the same mobo isn't available from an OEM builder like HP, or home built?

    Very nice, sticky!

    [​IMG]
     
  5. dbwillis

    dbwillis I liked watching you fuck my mom.

    Messages:
    6,691
    Joined:
    Jul 9, 2002
    Nice sticky, additonal info on the COA only sales :>
    ---------------------------------------------------------------------------------
    Anti-Counterfeiting Act of 2003 (U.S. only).
    Passed on December 24, 2004, this new US law makes it a criminal offense to distribute stand-alone COA labels. There is now a significant legal risk for dishonest reseller to illegally deal in stand-alone COAs and full weight of the law is finally behind Microsoft's efforts to level the playing field on behalf of our honest partners.
    --------------------------------------------------------------------------------
     
  6. HTPC Rookie

    HTPC Rookie Gawd

    Messages:
    590
    Joined:
    Dec 24, 2004
    Had this issue about two weeks ago with a Shuttle motherboard. So unstable I scrapped it. Reloaded the same copy of XP Pro on the new (MSI) board. Got message "activated too many times [sic]". Called Microsoft, explained to the tech the old motherboard was a piece of junk, would not and did not buy the same model to replace it. He gave me a new activation number with no argument, and added "hope you have better luck with this new one".
     
  7. OldPueblo

    OldPueblo [H]ardForum Junkie

    Messages:
    8,695
    Joined:
    May 31, 2003
    A good example to maybe add to the FAQ. MS can and generally will be lenient because believe it or not they CAN be a customer oriented company. They will pull you up short if they think you are abusing it however. They gotta keep it real. :p
     
  8. Phoenix86

    Phoenix86 [H]ardness Supreme

    Messages:
    6,658
    Joined:
    Mar 28, 2002
    Sticky please, with WGA in effect there are more and more Qs about licensing.
     
  9. djnes

    djnes Pick your own.....you deserve it.

    Messages:
    19,746
    Joined:
    Mar 24, 2000
    Nice job, SJConsultant. You've been firing off these answers for a while now, it would be nice to have this stickified.
     
  10. chrisf6969

    chrisf6969 [H]ardForum Junkie

    Messages:
    9,151
    Joined:
    Oct 27, 2003
    OK so should I buy this ? http://directdepot2u.com/item.asp?PID=636

    $58 Dell OEM WinXP Home disc and COA ?

    The store has no rating on pricewatch. What do you think?

    A dumb friend of mine bought a computer with a hacked copy of WinXP anyway, he needs a legit copy and is trying to save some money. Think these discs are ok ?
     
  11. Phoenix86

    Phoenix86 [H]ardness Supreme

    Messages:
    6,658
    Joined:
    Mar 28, 2002
    I think my sarcasm detector just blew up. :)

    The only time a COA is from Dell is kosher, is if you buy it with a Dell PC, generally from Dell. The license is transferrable *with* the PC that it was installed on by Dell.
     
  12. SJConsultant

    SJConsultant 2[H]4U

    Messages:
    3,626
    Joined:
    Jan 14, 2004
    The link you provided is for a DELL OEM product which is not legal for anyone but Dell to "sell" AFAIK. The website also states the product you linked does not come with a COA which *is* your proof of a license.

    Essentially all you are paying for is a Dell OEM CD which that in itself is not legal for anything but a Dell Computer it was manufactured for.

    Buyer Beware! The website operators are sketchy since they provide no address or phone number, only email addresses or a web form which suggest the retailor does not want to be tracked or contacted. Even their domain information does not reveal the true identity behind the website.

    My advice is to stay away from this vendor.
    Their Domain name was recently registered in March of this year.
     
  13. deeppow

    deeppow Limp Gawd

    Messages:
    386
    Joined:
    Sep 29, 2003
    I was told by a M$ OEM CD replacement representative (had a WinXP CD get to scratched to badly) that I was allowed to make one backup copy of the CD. He suggest I use that in the future to "perserve" the original CD. Replacement cost is ~$30 and slow (takes weeks sometimes).

    Can you comment on the M$ rep's statement?
     
  14. Phoenix86

    Phoenix86 [H]ardness Supreme

    Messages:
    6,658
    Joined:
    Mar 28, 2002
    That's perfectly legal and kosher.
     
  15. SJConsultant

    SJConsultant 2[H]4U

    Messages:
    3,626
    Joined:
    Jan 14, 2004
    Yes, You are allowed to make *one* copy for replacement use. If I were you I'd make a backup copy and use the backup copy to preserve the original CD.

    If the backup CD becomes scratched or damaged, then you can destroy the backup and make another backup so long as you only have one backup.

    EDIT

    * In order to keep this thread clean, I have opted to lock it for the time being seeing as there are so. Please direct any questions to a new thread *

    If you have corrections, comments, or additions, please direct them to my PM. Thank you.
     
Thread Status:
Not open for further replies.