I was trying to be careful with the wording. It's not "use it or lose it" so much as "the code can't be worth much if you let the last guy steal it". Any lawyer in a future case worth their salt would tear Elastic apart in the damages arguments.
1. Much of the relief sought in an infringement suit is the equitable relief (i.e., the injunction), not necessarily monetary damages.
2. If ElasticSearch can prove that Floragunn GmBH committed willful infringement, they can avail themselves of statutory damages of $150,000 per work, or, alternatively, any profits received by Floragunn (and all ElasticSearch has to show is proof of revenues minus expenses). See 17 U.S.C. section 504.
3. The fact that you give free samples away or willfully ignore some infringing behavior is not, in my experience, a conclusive indicator of the overall value of a good or service. (And there is not, to my knowledge, a legal doctrine that says so.) Apple gives all of its Macbook purchasers MacOS for free, yet nobody would seriously claim that a court wouldn't award them millions -- if not billions -- if the source code were misappropriated.
To your third point, I think we're comparing apples and oranges. Apple grants an OSX license to each macbook purchaser.
The equivalent example would be Microsoft releasing WinX which is just a straight line-for-line rip-off of OSX and Apple not doing anything about it. Then when someone else starts distributing OSX and gets sued they'd say "Apple already let Microsoft devalue OSX by distributing it". The distribution might have to stop, but Apple's lawyers are going to be fighting an uphill battle for significant damages. The same would be true here for Elastic if they didn't pursue this lawsuit.
But in the case of Apple in particular, Apple doesn't go after every infringement. The internets are full of instructions on how to set up a Hackintosh, including how to circumvent the copy protection measure (there's a 64-byte string that's a three-line poem widely available on the internets), but that did not stop them from going after Psystar.
I don't have time to do the legal research at the moment, but I haven't seen this argument used successfully in any cases to mitigate damages for a copyright infringement case. It's not like an ordinary tort where the plaintiff has such a duty. Do you have any cases to cite, or are you just guessing?
