The Toshiba Standoff

by Adam Kosmin

Many others have fought this battle in the past, but my education into the specifics of Microsoft's monopoly began a little over a month ago when I became interested in a Toshiba Portege 2000. While customizing the laptop with a sales representative at 1-800-TOSHIBA, I inquired as to whether I could purchase the device with no operating system installed. This question seemed to confuse the salesperson, who needed to pass the question on to a supervisor. Eventually, I was told that I could not purchase the hardware without a copy of Microsoft's OS pre-installed and this stipulation was not open to negotiation. At this point, I realized that on some level my rights as a consumer were being violated. I knew I needed to take a step back and educate myself before continuing this conversation. Here is what I found out:

(Taken from the Microsoft Windows 2000 Professional End User License Agreement)

YOU AGREE TO BE BOUND BY THE TERMS OF THIS EULA BY INSTALLING, COPYING, OR OTHERWISE USING THE PRODUCT. IF YOU DO NOT AGREE, DO NOT INSTALL OR USE THE PRODUCT; YOU MAY RETURN IT TO YOUR PLACE OF PURCHASE FOR A FULL REFUND.

After spending a few days researching other people's similar situations when dealing with these OEMs, it became clear to me that I was not going to be allowed to order a piece of hardware without a bundled OS. I would have to exercise my rights as defined in the EULA if I wanted justice. I called 1-800-TOSHIBA again to place my order for my new Portege 2000. Because I wanted to exercise my rights as defined by the Microsoft Windows 2000 Professional EULA, I confirmed with my sales representative that this OS was to be pre-installed on the system before I committed myself to the sale. Additionally, in an effort to be proactive, I informed a supervisor in the office that I would be pursuing this refund.

The laptop arrived sometime during the first week of August. After taking special care to leave the bundled software media (and associated documentation) in it's original packaging, I plugged in the laptop, connected the USB floppy drive, inserted a floppy disk and performed a network install of Red Hat Linux 7.3.

The following is a history (cleaned up a bit for readability) of the e-mail thread I have since engaged in with John Smithson of Toshiba America Information Systems, Inc. (TAIS):

Subject: re: License To: [email protected] From:
[email protected] Date: Tue, 20 Aug 2002 09:15:59
-0700
Adam ,
please send me your complaint.
Thank you,
John Smithson 800-272-0569x4034
Date: Tue, 20 Aug 2002 12:55:00 -0400 From: "Adam Kosmin"
<[email protected]> To: Adam Kosmin <[email protected]>
        , [email protected]
CC: [email protected] Subject: Re: License (Correct Version)
John,
        I sent the wrong license. Here's the correct attachment and
        snippet
from Windows 2000 Professional.
***********************************************************************
YOU AGREE TO BE BOUND BY THE TERMS OF THIS EULA BY
INSTALLING, COPYING, OR OTHERWISE USING THE PRODUCT. IF
YOU DO NOT AGREE, DO NOT INSTALL OR USE THE PRODUCT; YOU
MAY RETURN IT TO YOUR PLACE OF PURCHASE FOR A FULL REFUND.
***********************************************************************
Please note, that upon receiving the laptop, I inserted a Linux boot disk
and formatted the contents of the hard drive. This means that I never
accepted the terms of any End User License Agreement (EULA) that would
have been presented. I did not install, copy, download, access, or
use the software and therefore, am requesting a full refund as well
as instructions (if any) on how to return the unused product. Also,
please note that when I say "product", I am not speaking of the laptop
but rather the software as defined in the EULA.
Thanks, Adam Kosmin
Content-Disposition: inline;
 filename="EULA.TXT"
Subject: re: License To: [email protected] From:
[email protected] Date: Mon, 26 Aug 2002 13:22:06
-0700
Adam Kosmin,
I have received the following regarding your complaint.  Please consider
this as an answer to your question.
"The Master EULA (C1192-4) is a standard item on all BOMs, shipping with
all units. It is part of the documentation set inside the pizza box,
which means it is shrink-wrapped along with the Resource Guide, Warranty
booklet, etc.  However, now that we moved away from the pizza box to a
"pouch", it is may or may not be in a separately shrink wrapped package
inside the pouch.
It is a single half sheet of paper, printed on one side. The language
referred to is in capital letters in the 1st paragraph from the Master
EULA copied below for your convenience.
Notwithstanding anything to the contrary in the separate terms provided
by the Software supplier, TAIS does not accept the return of component
parts, or bundled Software, which have been removed from the TAIS
hardware product.  Pro-rata refunds on individual PC components, or
bundled Software, including the operating system, will not be granted."
Thank you for your inquiry,
Sincerely,
John Smithson
Case Manager
Customer Relations
800-272-0569 x 4034
Date: Mon, 26 Aug 2002 16:33:36 -0400 From: "Adam Kosmin"
<[email protected]> To: [email protected] Cc:
[email protected] Subject: Re: License X-Mailer: Sylpheed version 0.8.1claws
(GTK+ 1.2.10; i386-redhat-linux)
John,
        This is totally unacceptable. If I do not receive instructions
        on how to collect the reimbursement for my unused software by
        the end of the week, I will start filing my complaints with the
        Federal Trade Commission.
Please note that my complaints will target Toshiba since the license
clearly defines the manufacturer as being the party who is responsible
to provide this refund. It is clear to me that you have not actually
read the EULA and you have just forwarded me a generic response from
your Microsoft contact. Again, I must remind you that your company is
violating the terms of this license. I will not accept this reply.
Adam Kosmin
Date: Mon, 26 Aug 2002 16:53:21 -0400 From: "Adam Kosmin"
<[email protected]> To: [email protected] Cc:
[email protected] Subject: Re: License
John,
        In your last email, you pointed out the Master End User License
        Agreement. I have found the copy of the agreement in my "pizza
        box" and offer the following observations...
*** taken from the MEULA *******
IMPORTANT: Use of any software or any related documentation (collectively,
"software") preinstalled on, or shipped with a TAIS hardware product
or otherwise made available to you by TAIS in whatever form or media,
will constitute your acceptance of these terms.
********************************
Well, looks like I was able to avoid that trap since (as explained
earlier) I haven't used any software or any related documentation. My
legal foothold just keeps getting stronger and stronger with every
rebuttal that Toshiba offers. The bottom line here is simply that Toshiba
cannot bind me to terms that I did not agree to. As stated earlier, I am
giving Toshiba until the end of the week to provide me with instructions
on how to collect the refund I am entitled to. If I do not receive an
appropriate response by that time, I will file my complaint with the
Federal Trade Commission and take this to a lawyer.
Best, Adam Kosmin
Subject: Toshiba License Agreement To: [email protected] From:
[email protected] Date: Thu, 29 Aug 2002 10:59:33
-0700
Dear Adam,
I have relayed your message to the Legal Dept.  They have replied below.
The user has two chances to return the system. [The user accepts the
license when]
1.    The user first sees a shrink wrap label on the computer baggie,
reads about Toshiba's policy regarding no pro-rata returns, ignores the
written policy, and tears off the shrink wrap label.
On the plastic baggie that contains the notebook there is a shrink wrap
label that reads substantially as follows:
Toshiba America Information Systems, Inc. (TAIS) currently sells personal
computers with a Microsoft Windows operating system pre-installed, based
on general customer demand.  In order to maintain the highest quality
standards under the Toshiba brand name, TAIS is committed to delivering
computing solutions to the customer as a total PC system.
TAIS does not accept the return of component parts, or bundled software,
which have been removed from the PC system.  Pro-rata refunds on
individual PC components or bundled software, including the operating
system, will not be granted.
If you wish to return a complete PC system, contact the TAIS dealer where
you purchased the product, and comply with the dealer's standard return
policies and procedures.
Sincerely,
John Smithson Case Manager Customer Relations 800-272-0569x4034

This was the final e-mail exchange between John Smithson and myself. On Tuesday, September 3, 2002, I called him and explained that I was not satisfied with the position Toshiba had taken. He replied, “see you in court”.

Along with filing my complaint with the Federal Trade Commission that same day, I am charging Toshiba Corporation with making a conscious decision to deny me the refund I am entitled to for my unopened and unused copy of Windows 2000 Professional. Additionally, I am charging Toshiba with trying to strong arm me into accepting unwanted product through the use of additional licenses that make broad assumptions about my acceptance when, in fact, I never consciously made any effort to forfeit my rights regarding this refund. Although I am not a lawyer, my instincts tell me that Toshiba's “little sticky label” and MEULA violates article 2 of the UCC, which states:

2-204. Formation in General (1) A contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract.

My take on this is that both parties need to know they are entering into a contract for it to be worth anything at the end of the day. Toshiba's MEULA does not disclose to the user the opportunity to enter into any such agreement. Rather, it wrongfully interprets a totally unrelated (but yet predictable) action made by the user as acceptance of an offer that may never have been reviewed.

In closing, I have a few questions for the community:

1. Has anyone actually gotten refund program this work? I would appreciate hearing about your experiences, and I promise to post them (with your permission) so that others can benefit and gain additional insight.

2. Are there any law students who would like to explore this situation for a research project or school assignment and publish their results? I can only imagine how cheap law school would seem if enough momentum was created and a class action lawsuit was won that once and for all rid the world of this violation against consumer rights.

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