It comes down to a classic carrot or the stick choice. You either make pirating software so risky that people are afraid to do it (The Stick) or you make legal ownership so desirable that no one wants to pirate your product (The Carrot).
It's unfortunate that the industry is deciding to put all of their eggs in the "Stick" basket, because people will only obey out of fear when they are being actively and aggressively policed and punished, and they will take any opportunity to break the rules when they can. If you go with the "Carrot" method, people will police themselves.