A friend just asked me a question about copyright and terms-and-conditions when using a product and it's quite interesting.

I have a website where I host software projects, and include a license with every release of my software. What happens, if say someone downloads my software, removes all my licenses, and reuploads it in their own domain. Sure, I can send them notices to remove it, but lets say someone downloads it from their site and then uses it in a commercial product, or in a way sanctioned by the license.

Does this third-person then suffer in some way as the source they obtain it from was illegal or do they immediately have to abide by the *real* terms and conditions if contacted by the owner of the software?