Earlier, about everyone believed Microsoft meant that they will be offering a free genuine upgrade to Windows 10 within the first year not only to genuine users, but even pirated(non-genuine) users.
However, Microsoft has clarified that their statement was misinterpreted. Microsoft representatives have indicated that the users that have pirated copies of Windows 7 and 8 will be able to upgrade to Windows 10 but the version they will get will be considered 'unofficial', which means the update will be non-genuine, just like their previous version of Windows was. Microsoft has stated:
With Windows 10, although non-genuine PCs may be able to upgrade to Windows 10, the upgrade will not change the genuine state of the license ... If a device was considered non-genuine or mislicensed prior to the upgrade, that device will continue to be considered non-genuine or mislicensed after the upgrade.
Microsoft has not yet revealed what the difference between the genuine and non-genuine versions of Windows 10 will be, but people are speculating the non-genuine version might be a 'lite' version of the operating system, or will have restrictions in features, or a ban from the Windows Store and such.