Technalign, the distributor of MEPIS Linux, said they plan to implement a serial number system for the retail version that will prevent unauthorized users from downloading free updates from Technalign's servers.

"Everybody's charging for updates," said Technalign CEO Dianne Ursini, "but no one wants to buy a $50 package and then pay monthly updates."
She says the system is in place to regulate bandwidth and to keep from having to charge for updates. Of course! The bandwidth! That all-expensive commodity, which although limited is dirt cheap these days. And they are already charging for updates. Very few home users will pay for a bundle of programs, the most interesting of which they can get for free. Companies, who will pay for MEPIS also normally get support contracts.

I realize businesses don't normally care about the philosophy of a license or a product, but in this case, Technalign seem to have missed the free software notion entirely (remember: free, as in freedom). Another interesting aspect arises from the existence of non-proprietary components, usually licensed under the GPL. While version two of the license does not mention copy-protection technologies, the current draft of GPLv3 does.
The license is not out yet, but it's only a matter of time before the bulk of any Linux distro is protected by it.
The proposed scheme would obviously go against the spirit of the license, but it may go against the letter, too. It will be interesting to note the free software community's reaction.

MEPIS creator, Warren Woodford said first ISO's with serialization integrated will be supplied after MEPIS 3.4-3, which is the release candidate, goes final.
"Dianne is shipping a boxed product and making a commitment to have a specific version on store shelves and having it supported for a long time."