DEFINITION

Permission granted by the owner of an intellectual property right to do something restricted by that right, often within a defined time, context, market line, and/or territory (Source: IPR helpdesk).

IMPACT ON e-BUSINESS

Most common use of licences is related to software. If you are a software developer, why should you license software rather than sell? The answer is given by the world's largest software company, Microsoft. If the garage-based yougster Bill had sold his software to IBM (instead of licensing it to IBM for the installation and use within IBM computers), he would have remained a (small?) software developer. Instead, he kept his exclusive right on his software, built upon it and became eventually the richest man in the world.

A license lays down the rules under which a licensee (the person who pays for the use of the license from the licensor) is allowed to use the software. Proprietory software, that is software owned by somebody who has the exclusive right of it, has licences that give limited use, e.g. for a restricted number of computers , for personal (not business) use etc.

MORE ON LICENSING

When you "buy" a CD or CD-ROM or DVD, you actually buy only the carrier, that is the glittering round disc. The content on it is licensed to you, usually for personal use only (a notice that can be seen scrolling down before each film, to prevent unlawful use, e.g. showing the film in public, in a club etc.). The same is valid for music: you are supposed to use the content of a CD only for private, personal use. For example, you cannot use the music in public, e.g. as DJ.

OPEN SOURCE LICENSING

In contrast to the "traditional" way of running a software business by granting licences to users in exchange for money, "open source software" developers allow their copyright to be used under very permissive licences allowing their software to be copied, reproduced and distributed, and the software's source code to be communicated to the public. In exchange, the licensee must usually maintain the entire guarantee, disclaimer, and attribution/copyright notices on the software intact (Source: IPR Helpdesk).
For more information on OSS see Open Source Software and Licenses for Open Source Software.

PRACTICAL LINKS

If you are a software developer, you may want to have a look at this: Core elements for a licensing agreement

WIKIPEDIA article on Software Licence

Check the EUPL guidelines for users and developers to see what the EUPL - European Union Public Licence can do for you!

RELATED ISSUES

Open Source Software
Copyleft