Is Windows 7 Upgrade Illegal?
Microsoft says doing that violates Windows 7 End User License Agreement
Now here's something really quirky and interesting from Microsoft. With the launch of Windows 7, almost everyone is busy installing the new OS on their systems. These include brand new systems and existing computers that already had an older version of a Microsoft Operating System running. Most Vista users with a "full" license were eligible for an upgrade option wherein they could get Windows 7 for a discounted price.
In a recent blog post, Microsoft has clarified as to how a clean install done on a blank hard drive from an upgrade install disc by an user who does not own a full license is in violation of the Windows 7 EULA (End User License Agreement). The post was triggered owing to blog posts and "how tos" that help users do a clean install from an upgrade disc. Since the upgrade option is a cheaper way of getting the OS, it was a fairly attractive means of getting a licensed version of the product for less. Microsoft's EULA for upgrade discs explicitly states that must own a full version of a previous version of Windows if you want to use the Windows 7 upgrade disc. Now, what this means is that when you do a clean install, you are no longer own a "previous version" and are hence breaking the terms of the EULA.
Microsoft has clarified the circumstances in which a clean install is perfectly legal in the following excerpt from the post:
"Now there are many, many, many, many of you out there that already own Windows licenses that qualify for the Windows 7 Upgrade, so this is a non-issue for you. (I am talking about people who own a FULL license for a previous version of Windows for their computers already, as shown in the first picture example above.) For you, since you have the previous version FULL Windows license and qualify for the Windows 7 Upgrade, you have the rights to do a "clean" install. For those of you without an existing FULL Windows license to upgrade from, you should be aware that an Upgrade license by itself is not a license to install and run Windows on your computer. (As an FYI, those who don't own a full previous version Windows license, and just downloaded the Windows 7 Beta, RC, or RTM code during the trial phases, the Windows 7 Beta, RC, and RTM trials are not qualifying licenses for the upgrade since they are just trial software, not fully licensed software.) In order to be eligible to use the Windows 7 upgrade, you need to have a qualifying license to upgrade from."