I've never worked with php licensing before, but I found an archived thread on another forum that discusses it:
http://www.webhostingtalk.com/archi...p/t-403067.html
Basically, you open a socket from the code to your own server, which validates the license key.
Take note: You need to encode your licensing code with software (they recommend IONCube, though I am not a fan), otherwise, people will be able to delete the license information. And don't just have the one license check code encrypted, obviously they could delete that and make it work fine. Put some vital stuff (eg, database connections, etc) with it so deleting the license code makes the software unusable.
You should probably have the software licensed to a domain. That way, the license information must come from the domain it is registered to (eg, people can't give their license to 100 friends).
Bruce
PHP License question 
