Abstract: A system for protecting software from copying wherein the software to be protected is placed on the computer system in two parts. A first part is stored in non-volatile storage, such as a hard disk or floppy disk within the computer system, and a second part is stored and executed in a "hardware key", which is attached to the computer system. The second part is stored in volatile RAM and will be erased when electrical power is removed from the hardware key, or when the software stops execution. This requires that the second part of the software be reloaded each time the hardware key is powered up. Typically, the second part of the software will be loaded from a network, or from a cable network, thus reloading of the second part into the hardware key is a trivial matter, so long as the user is an active subscriber to the network or cable network.