Generating and interpreting secure and system dependent software license keys

A technique is provided for generating and interpreting secure and system dependent software license keys. According to one or more embodiments of the present invention, a device executing an encoding algorithm may generate a software license key by applying several layers of security. Illustratively, the device may initially define a license data representing a software license for the software. The device may also compute an authentication code based on a unique identification of hardware upon which the software is configured to operate. The license data and authentication code may be combined and encrypted into an encrypted result, which may be transformed into a software license key (e.g., human readable). Also, the device may apply a predetermined encryption technique (e.g., cipher) during the transformation as an additional layer of security. Conversely, a device configured to operate the software may execute a decoding algorithm to interpret the software license key similarly in reverse.