Abstract: The present invention is a system and method for soft modem software protection using a key. The key is stored in a hardware device in the modem subsystem and transmitted to the central processing unit (CPU) in a designated time slot of a serial bus of a computer. In one embodiment, the key is stored as bit data in the registers of the modem codec. In another embodiment, the key is stored in a hardware device connected to the general purpose input output pins of the modem codec. In a further embodiment, the key is stored in a hardware device connected to the on/off hook and analog input connections of the modem codec. A second key is associated with the soft modem software. If the second key is incompatible with the transmitted key, the operation of the soft modem software is altered. Altematively, the soft modem software is a customized version downloaded from an external computer to a local computer. The customized version has a unique identifier associated with the local computer associated with it.