What is a License?

Generally, a license means the permission or permit granted by a vesting authority to another person for using, owning, or controlling a thing, or for carrying out an act. As discussed in succeeding paragraphs, the term license can be used in varying contexts.

In the public space, a license (also referred to as “permit”) is issued by state authorities or regulators to individuals and corporate entities to accommodate activities that would otherwise have attracted sanctions if the permission was not granted. This may involve the payment of prescribed fees or the establishment of proficiency in those activities by the licensee. 

For instance, it may be a requirement that a certain amount of money should be remitted to the coffers of the State before liquor sellers would be permitted to engage in liquor-selling. Also, professional regulators may, as a pre-condition, demand that prospective members of their professions must have demonstrated a certain level of competence before they could be permitted to practice the profession.

Furthermore, a license can be granted when dealing with proprietary rights. For instance, an Intellectual Property (IP) rights owner (the licensor) may authorize another person (the licensee) to exploits his IP rights in such a way that would have amounted to an infringement if permission was not given. A contract usually manifests this arrangement. This same rule applies to the exploitation of real properties.