To better protect against unauthorized use of your applications. Google introduced a licensing service for applications in Android Market. “Up until now, until now, users were able to install pay apps without paying of, if they’ve a “apk” installer files of the program.” Now this simple and free service provides a secure mechanism to manage access to all Android Market paid apps targeting Android 1.5 or higher.
The system works by allowing application to query Android market’s licensing server, and return information based on whether or not the app is licensed for use for current user based on sales records. According to Google, the service operates in real time over network — Wifi, EDGE, 3G or GPRS and “provides more flexibility in choosing license-enforcement strategies, and a more secure approach in protecting your apps from unauthorized use, than copy protection.”
More Info: Licensing Your Applications