There have been several questions about the terms in the Microsoft OEM System Builder Agreement where it stated that an OEM Microsoft Desktop Operating System license could be sold with “non-peripheral” hardware and how this perceived “loophole” was being exploited by many who were listing OEM Microsoft Windows XP Pro licenses for sale with a cable or some other dimeshop “non-peripheral” hardware item. Well, we have heard your concerns and requests for simpler OEM terms which were the same for OEM Server, Desktop Operating System, and Desktop Application licenses and as of September 1st a NEW OEM System Builder Agreement went into effect. Here are some of the changes you need to know about:
In this new Agreement (which you can see at: http://oem.microsoft.com/script/contentpage.aspx?PageID=553068), you will notice a few changes to address these actions by these people:
Under the Software Distribution section of the Agreement, you will notice it now states:
“4.1 We grant you a nonexclusive right to distribute an individual software license only with a fully assembled computer system. A “fully assembled computer system” means a computer system consisting of at least a central processing unit, a motherboard, a hard drive, a power supply, and a case.”
You will notice the loophole that people have been exploiting (the former language which stated that an OEM desktop Operating System license could be sold with “non-peripheral hardware,”) is no longer in place. It is now very simple and straightforward: an OEM license must be sold “only with a fully assembled computer system.” Loophole closed.
Also, in section 6. Preinstallation requirement, you will notice it now states:
“When you distribute an individual software license for a desktop operating system or application software, you must preinstall it on the fully assembled computer system’s hard drive using the OEM Preinstallation Kit (“OPK”) provided in this package or otherwise made available by us. This preinstallation requirement does not apply to server software.”
So in addition to having to sell an OEM Desktop Operating System license with a fully assembled computer system, it must also be preinstalled on the fully assembled computer system that it is being sold with. Again, loophole closed. These same restrictions would also apply to any OEM Office license as well. OEM Office must be sold with a fully assembled computer system and must also be preinstalled on the fully assembled computer system that it is being sold with. OEM Server licenses must also be sold with a fully assembled computer system; however, the preinstallation requirement clause does not apply to OEM server licenses as you can see in section 6 above.
So yes, we have seen what people have been doing to take advantage of the System Builder Agreement to date and the Worldwide System Builder Team has made these changes specifically to address and correct these actions.
You will also notice that we have kept the advertising clause in the Agreement as well under section 15. Miscellaneous where it states:
“15.1 You must not advertise, provide a separate price for, or otherwise market or distribute individual software licenses, or any part of them, as separate items from the fully assembled computer system as applicable.” As such, since OEM Software cannot be sold without a fully assembled computer system, you are not allowed to advertise any Microsoft OEM Software separately from the fully assembled computer system that it must be sold with. If you see this being done, you now know this is not allowed. As always, we encourage anyone who sees something they believe to be illegal, counterfeit, or illegitimate to let us know about these things through any of the following methods:
1) Phone: 1-800-RU-LEGIT (this is completely anonymous)
2) Online: http://www.microsoft.com/piracy
3) Email: email@example.com
Also, when acquiring Microsoft OEM software (such as OEM Microsoft Office 2003, Windows XP Pro, Windows XP Home, Windows SBS 2003, etc.), be sure you purchase the OEM software through an authorized OEM distributor (see the list at: http://www.microsoft.com/oem/authdist/default.mspx) as this is the only way to ensure you are purchasing legitimate OEM Microsoft software.
Have questions about who to contact if you know of illegal software being used? We provide that information in the post HERE to help out.
Thank you and have a wonderful day,
Microsoft US Senior Manager,
Small Business Community Engagement
This posting is provided “AS IS” with no warranties, and confers no rights