My limited understanding is that copyright dictates your right to copy media, and the restrictions surrounding that. Laws about software licensing consider factors such as installing software from physical media to a disk, copying code on disk temporarily to memory, how many machines you can have it installed on at once, etc.
I'm fairly sure this is a legitimate lawsuit according to the letter of the law. However, this is one of those situations where the law has become outdated and does not reflect real world use anymore. Not to mention citing the "Audio Home Recording Act of 1992" even though it's not reasonable to call a vehicle a home.