I am developing a piece of software in Python that will be distributed to my employer's customers. My employer wants to limit the usage of the software with a time restricted license file.
If we distribute the .py files or even .pyc files it will be easy to (decompile and) remove the code that checks the license file.
Another aspect is that my employer does not want the code to be read by our customers, fearing that the code may be stolen or at least the "novel ideas".
Is there a good way to handle this problem? Preferably with an off-the-shelf solution.
The software will run on Linux systems (so I don't think py2exe will do the trick).
Python, being a byte-code-compiled interpreted language, is very difficult to lock down. Even if you use a exe-packager like py2exe, the layout of the executable is well-known, and the Python byte-codes are well understood.
Usually in cases like this, you have to make a tradeoff. How important is it really to protect the code? Are there real secrets in there (such as a key for symmetric encryption of bank transfers), or are you just being paranoid? Choose the language that lets you develop the best product quickest, and be realistic about how valuable your novel ideas are.
If you decide you really need to enforce the license check securely, write it as a small C extension so that the license check code can be extra-hard (but not impossible!) to reverse engineer, and leave the bulk of your code in Python.
"Is there a good way to handle this problem?" No. Nothing can be protected against reverse engineering. Even the firmware on DVD machines has been reverse engineered and AACS Encryption key exposed. And that's in spite of the DMCA making that a criminal offense.
Since no technical method can stop your customers from reading your code, you have to apply ordinary commercial methods.
Licenses. Contracts. Terms and Conditions. This still works even when people can read the code. Note that some of your Python-based components may require that you pay fees before you sell software using those components. Also, some open-source licenses prohibit you from concealing the source or origins of that component.
Offer significant value. If your stuff is so good -- at a price that is hard to refuse -- there's no incentive to waste time and money reverse engineering anything. Reverse engineering is expensive. Make your product slightly less expensive.
Offer upgrades and enhancements that make any reverse engineering a bad idea. When the next release breaks their reverse engineering, there's no point. This can be carried to absurd extremes, but you should offer new features that make the next release more valuable than reverse engineering.
Offer customization at rates so attractive that they'd rather pay you do build and support the enhancements.
Use a license key which expires. This is cruel, and will give you a bad reputation, but it certainly makes your software stop working.
Offer it as a web service. SaaS involves no downloads to customers.