Hardware key removal on a test system

Question

One of my company's applications still requires a hardware key to run, but we're currently in the process of removing that requirement and replacing it with an online check. The issue we are having is that we allow our customers to set up test systems with copies of their live databases. With the hardware keys, that isn't a problem as they get a special key that tells the software it is a test, but we're trying to figure a way to do this with a software only check. Our only idea so far is to check the hardware against a registered list in the database, but before we implement this, I want to ask how others have solved similar problems?