Ask HN: How to control licensing with a server control?

I'm developing an asp.net server control for the first time and I was wondering how others have dealt with licensing and piracy. Function of the control: Calls out to other servers periodically, builds a local cache and then displays the result to the end user. There's a web admin page for the site owner to configure it's settings. Options I've thought about: Restrictive - Have the web admin page call out to my server to make sure the license is still valid. There would be leeway in case my server goes down for some reason. Middle of the road - Have the control generate a key that the license is built on. The user would submit the key and I would generate a license based on the key. User would have to resubmit their key for a new license if they move servers. Loose - Generate a license key when purchased and have the control match the license with my server only once on installation. I like this option best because it gives the user more flexibility and I can suspend the license from allowing more installs if it looks like it's being abused. Questions: Are there better options than these? What would you put up with as a developer? Which option seems the best to you? Am I being overly protective even with the "loose" option? Other thoughts: How would you restrict the demo version? My current idea is to replace some text with junk randomly in the output until it's registered.