Dallas... it is illegal to download or keep music or software that you do not have a license to use.
http://www.copyright.gov/title17/92chap10.html
This is in regards to copyrights of digital audio recordings.
"§ 1001. Definitions"
"(1) A "digital audio copied recording" is a reproduction in a digital recording format of a digital musical recording, whether that reproduction is made directly from another digital musical recording or indirectly from a transmission."
This means both the person sending and recieving the transmission are subject to prosecution. Whether through actual recording or through digital transfer of a recording.
"( c ) Prohibition on Circumvention of the System. - No person shall import, manufacture, or distribute any device, or offer or perform any service, the primary purpose or effect of which is to avoid, bypass, remove, deactivate, or otherwise circumvent any program or circuit which implements, in whole or in part, a system described in subsection (a)."
The first part is the clarification again that any hardware modification for the sake of bypassing copyright protection are illegal. Even when importing, which refers to the installation or the purchasing of such an installation.
http://www.copyright.gov/title17/92chap1.html
"§ 102. Subject matter of copyright: In general26"
"(a) Copyright protection subsists, in accordance with this title, in original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. Works of authorship include the following categories:"
The basic legal definition of copyright protection makes no distinction between use, sale, distibution, or receipt.
"§ 107. Limitations on exclusive rights: Fair use38"
"Notwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include —
(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or value of the copyrighted work.
The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors."
The first bold explains fair use. Fair use section describes abuses prosecutable under US and international law. Commercial use is seen s not just sale but also use avoiding having to pay for someone elses work.
EDIT: I found another... this is from the WTO which the US fully supports (cough... runs).
http://www.copyright.gov/docs/2180_stat.html
This explains why the WTO doesn't push for prosecutions. It is hard to prove that the user knew it was illegal. It doesn't really matter if a person knows something is illegal or not, but it is hard to get a jury to convict and it would be a waste of money. However their have been cases where users have been financially liable due to the wording of the law. Just because it isn't prosecuted, doesn't mean it is legal or that you are protected from civil action.