It's a ridiculous position if one can't just ask the court "is this infringing" without needing an inter partes legal proceeding.

Maybe neither side here wants an answer, but having an answer would seem to make things better.

Easy to avoid. Ask the user to put it's own decyrption key coming from their own console.

How is it possible to copyright/trademark a key? Is there precedence for things like activation keys or breaking someone's crypto being illegal?

Seems like a failure to secure your software is not something you could reasonably pursue in court.