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My thoughts on software piracy

A fellow software entrepreneur emailed me today with this question:

My question is, as I am trying to get an application of mine built in AIR, and it is commercial software, with features disabled that I want enabled after entering a license key…. since AIR sends out your whole SWF file that can easily be decompiled, what do you recommend doing to protect your IP since it’s basically being given away free with every download? It could also be easily cracked I assume.