As a business, if i design a board with a ATMEGA16u2 as the serial chip, what is the most legal option, short of buying my own VID?
Can I use Arduinos, or should I use Microchips shared VID/PID option?
Legal option for what? Do you want your own ID?
It is a custom Uno, I will be selling it. Am I legally allowed to sell it commercially with the Arduino VID and Uno PID, or should I use the shared Microchip VID?
I suggest that you contact Arduino via https://www.arduino.cc/en/contact-us. Or your lawyer 
I really don't know about the legal requirements...
But I'd start with USB.ORG.
The "legal" restrictions might be related to use of the USB trademark/logo. So maybe you can bypass that if you don't use the logo.
I wouldn't expect any problems using the Arduino or Microchip VID unless you are making a custom driver and then you might need your own VID before getting getting the driver registered with Microsoft. As far as I know Microsoft approval isn't required but the user will get a warning when installing it
And I think FTDI (using USB as a COM port) gets-around all of the restrictions/requirements.
In the published firmware repo is this statement:
The production version of the arduino-usbserial firmware uses the
Arduino VID. This is only for use with official Arduino hardware and
should not be used on other products.
https://github.com/arduino/ArduinoCore-avr/blob/master/firmwares/atmegaxxu2/README.txt
Companies such as FTDI and Silicon Labs will issue you a PID for use with their VID if you use their chip.
Yep, the board I had a FT232 on comes with the manufacturers firmware already loaded.
But how’s it work with a ATMEGA16U2?
Well it uses all the Arduino drivers and libraries, it’s an Uno with more features.
It does not help you with the ATmega16U2, I only mentioned it in case you would like to consider not using ATmega16U2. I mentioned the other manufacturer’s chips because they permit you to do what you want to do for free (ish) if you use their chips. I think if you want to use ATmega16U2 you will need to purchase your own VID/PID because you are not supposed to use Arduino’s VID/PID for your own board you plan to sell.
Well, you "can't" use Arduino's, since they explicitly say you can't.
I can't find info on the "Microchip USB sub-licensing program", so it's hard to say.
Last I heard, the USB people don't approve of sub-licensing, so the "most legal" way surely involves getting your own VID.
See also: Microchip forum discussion on the issue.
This could be an option…
Perhaps, if you want to make your project open source and really want ATmega16U2. It looks interesting.
I need HID, not sure what other option I have.
I don’t know. You mentioned in your first post you would design it. Do you also plan to manufacture or have it manufactured and sell them, or does it end with you producing some for yourself and then you’re done? If you are going to make and sell them, will the project be open source, you’ll give away the design such as schematic and PCB files? I don’t know how open source a design needs to be, if providing the schematic is considered open source or not. Anyway the web site you gave a link to mentions if you have open source they will issue you the PID. westfw gave the Microchip forum thread discussing it but I don’t have a login to read the thread and not interested in signing up for one at this moment to research. Did you sign up for a login and read that thread and see what came of it?
“Microchip Sub-licenses the PID to customers whose end product quantity does not exceed 10K. Has anyone used it here?
If quantity exceeds 10k, I may need to use another VID+PID combination.”
Then went on to ask what happens after 10k.
I will be offering the product on various platforms, yes. During testing, I will use the Arduino VID/PID as it’s only personal use at that point.
Yes, open source is pretty much all I do. Though I am building a “proprietary” board called Outback Edge that I am NOT open sourcing, however it doesn’t have a ATMEGA16U2, so it isn’t a concern.
Will it just be the hardware? Or will there be software on it? If the latter you will also have to take into consideration all licenses for that.
Yes, understood. Though that’s a different issue for a different thread, I may create when I’m through the design process.