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ok based on your description this could be taken one of 3 ways.
either
1. he returned a home burned copy (personal backup) of an original he bought from someone else by mistake
2. he bought a really good pirated copy of your video (with all the nice labeling and stuff on the dvd)
3. he is making bootleg copies and basically costing your millions
assuming it was an obvious fake, (wrong disk in the right box kind of thing)
send him a nice letter telling him that he unfortunately sent you "backup" copy of the disk, reminding him that while he does have a fair use right to back up his content he must get rid of cede backup when he asks for a refund for the original.
If it is the second, politely tell him that you have forwarded the pirated copy to the RCMP /FBI whatever and would like to get the information on who he bought it from since that person was obviously selling pirated dvds.
if you want to put the fear of god in him mention that you would hate to see a good customer like be wrongfully accused of being such a pirate if he failed to produce such proof.
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“When crimes occur through the mail, you don’t shut the post office down,” Steve Wozniak
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