The government, whose prosecutors brought this case - aren't arguing that the cheese "could have been poisoned" except in the sense that we have no idea what counterfeiters might or might not get wrong in the process of knocking off a product and we _don't want to find out_ which is why counterfeiting is a criminal offence.
Their argument is that Lundgren's product, a CD that says it's a Windows restore CD from Dell, but is actually a counterfeit produced by Lundgren in China, is (duh) a counterfeit of the Windows restore CD, which sure enough Microsoft sells for (depending on which version exactly) $25.
If you sell your cheese, saying this is a Buxton Blue, (a protected designation) but it isn't, that's counterfeiting. You have counterfeit cheese. Saying "Oh, well I saw them giving cheese away in a supermarket once, so it's free, so there shouldn't be a penalty" doesn't wash. Are you giving it away as a promotion in a supermarket? No. You're selling it, saying it's Buxton Blue. So the right question is, "How much does Buxton Blue sell for?" and the equivalent here is exactly the question Microsoft was asked, "How much do you charge for these CDs?" to which the answer is $25.
Lundgren is a counterfeiter. It's sad how many people are buying what is literally a sob story from a convicted criminal as though it's a neutral third party discussing the case.
As far as I understand the accused trafficked forgeries of Dell recovery CD. These CD do not include a Windows License and Microsoft does not sell such CD either. The article is lamenting that very misunderstanding was made by the court.
Now you're saying the court got it right and the accused was actually selling Windows licenses. Who is right?
So, think this through. Why is there a market for thousands of these CDs? You have 140 perfectly good (but say four years old) PCs you paid £80 each for them from the people replacing them. You will clean them up, reformat, sell them for £200 each. It won't make you rich but it's a living and feels good. But, your buyers expect Windows. The people who sold them to you had Windows licenses, but they wiped the disk because of course they did. Microsoft offers a solution for £18. But a bloke you met at the place that sells spare parts for LaserJet printers says he can get the genuine OEM recovery CDs for half that and those would work. Bargain.
Lundgren couldn't sell Windows licenses any more than he could sell the Mona Lisa. He didn't have either. But he absolutely could sell a counterfeit product you can use "instead" of buying the license.
The argument that since the counterfeits are in fact worthless then the dollar amount for purposes of assessing severity is zero makes no sense. Of course the counterfeits are worthless. They're counterfeits. The law is pretty clear that the correct question is how much would the real thing be worth. It's not the court making that up, it's right in those sentencing guidelines.
You keep claiming that he sold licenses, albeit counterfeit ones. The way I understand it is he sold copies of recovery CD. Those could be used to restore a copy of Windows with a license from another source.
Maybe the license was on a sticker on the computer, maybe it was on a broken old medium. Maybe the people got a license key from another broken computer? What do we know? Why should the court care?
From what I read (just this one article) he never claimed to provide a Windows license. If you have more information please kindly share.
Microsoft is arguing that the cheese could have been poisoned. And that people were buying less cheese because of his efforts.