In one form, product activation refers to a method invented by Ric Richardson and patented (US 5,490,216) by Uniloc where a software application hashes hardware serial numbers and an ID number specific to the product's license (a product key) to generate a unique installation ID.
System Locked Pre-installation, often abbreviated as SLP, is a procedure used by major OEM computer-manufacturers in order to pre-activate Microsoft Windows before mass distribution.
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Activation is sometimes done offline by entering the key, or with software like Windows 7, online activation is required to prevent multiple people using the same key.