Software Activation / Registration Question.

I am finally finishing an application that took a year to finish! Feels good. But I need input on a question.

I am creating an activation process when someone purchases the software from my website. There are licenses that can be purchased. Everything works, but I have it setup where if you install the software, then lets say in a few months you uninstall it, that is considered 1 license. So if you were to install again on the same computer, you would be using up another license.

Is that fair? What is standard? Should it be, one license per computer or one license per install?

The only reason I am having licenses is to try to prevent software piracy.

Make it one license per computer. If I wanted to install a new hard drive, and simply re-install the OS on the same computer, I would send all of the information about the computer you can get (not OS related) to your activation server account for that person. Don't let people who have a different computer use the software, and you have an effective license.

Ok cool, that sounds more effective. Thanks!