I was building a new Hyper-V server using Windows Server 2012 R2 and ran into this error. The scenario? You set up a new VM using the default settings, and configure the use of Dynamic RAM.
Once the VM is set up, you start this and get to the point of typing in the license key. In the case of the Datacentre edition, with Generation2 VMs, you can use the Automatic Activation Keys as detailed in the Technet article here – http://technet.microsoft.com/en-au/library/dn303421.aspx. And the following error occurs – “We couldn’t verify the product key. Please check your installation media.”
Alternatively, you may get the following message after selecting the operating system – “Windows cannot find the Microsoft Software License Terms. Make sure the installation sources are valid and restart the installation.”
The solution is straightforward. You need to assign at least 576MB RAM as the starting value for the VM to bypass this problem. I usually configure my virtual servers to start with a minimum of 1024MB RAM.