Latency has nothing to do with the CD-Key or the game itself. Latanecy is a networking issue - it's saying that the computers are incapable of working together because your network won't send info between them fast enough for the game to run properly.
Any particular network device has a minimum time that it requires to deliver data, a time that you can never beat no matter how small the amount of data being sent between computers. That's called the latency of the device. Higher quality network devices have a lower latency, lower-quality equipment has a higher latency. Latency can also be caused by bad cables, extremely long cables, or one badly configured computer that simply won't accept and send off data to its partner at a reasonable rate.
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