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The permission granted by competent authority to exercise a certain privilege that, without such authorization, would constitute an illegal act, a trespass or a tort. The certificate or the document itself that confers permission to engage in otherwise proscribed conduct.
A license is different from a permit. The terms license and permit are often used interchangeably, but generally, a permit describes a more temporary form of permission. For example, if a homeowner seeks to make structural additions to her property, she may have to apply for permits from local land-use and zoning boards. These permits expire on a certain date or when the work is finished. By contrast, the contractor who completes the work will likely hold a local license that allows her to operate her business for a certain number of years.
Licenses are an important and ubiquitous feature of contemporary society. Federal, state, and local governments rely on licensing to control a broad range of human activity, from commercial and professional to dangerous and environmental. Licenses may also be issued by private parties and by patent or copyright holders.
The great many activities that require a license issued by a government authority include fishing; hunting; marrying; driving a motor vehicle; providing health care services; practicing law; manufacturing; engaging in retail and wholesale commerce; operating a private business, trade, or technical school; providing commercial services such as those offered by whitewater rafting outfitters and travel agencies; providing public services such as food and environmental inspection; and operating public pinball machines.
Not all persons engaged in a licensed activity need to obtain a license. For example, the owner of a liquor store must obtain a license to operate it, but the cashiers and stock persons need not obtain a license to work there. By contrast, not only does a dentist have to obtain a license to conduct business in a dental office, but dental hygienists and other dental assistants must each have a license to work in the office.
A license gives a person or organization permission to engage in a particular activity. If the government requires a license for an activity, it may issue criminal charges if a person engages in the activity without obtaining a license. Most licenses expire after a certain period of time, and most may be renewed. Failure to abide by certain laws and regulations can result in suspension or revocation of a license. Acquiring a license through fraud or misrepresentation will result in revocation of the license.
Licenses are issued by the administrative agencies of local, state, and federal lawmaking bodies. Administrative agencies are established by legislative bodies to regulate specific government activities and concerns. For example, the U.S. Congress and state legislatures have each created an agency that exercises authority over environmental issues. This agency usually is called a department of environmental protection or of conservation. It is responsible for issuing licenses for activities such as hunting, fishing, and camping. If the same agency has authority over environmental cleanups, it also may be responsible for issuing licenses for inspectors and businesses that specialize in waste management and removal. Specific boards or divisions within an agency may be responsible for issuing licenses.
The licensing process helps to control activity in a variety of ways. License application procedures allow government authorities to screen applicants to verify that they are fit to engage in the particular activity. Before any license is issued by an agency, the applicant must meet certain standards. For example, a person who seeks a driver's license must be at least age 16, must have passed a driver's test and a vision test, and must pay a fee. If an applicant is under age 18, the state department of motor vehicles may require that the applicant obtain the signature of a parent or guardian. If the applicant seeks to drive other than a passenger vehicle, such as a motorcycle or semi-truck, the applicant has to pass tests that relate to the driving of that vehicle and obtain a separate license for driving that vehicle.
The requirements for certain business licenses can be stringent. For example, an insurance adjuster in Maine must be at least 18 years old; be competent, trustworthy, financially responsible, and of good personal and business reputation; pass a written examination on insurance adjusting; and have been employed or have undergone special training for not less than one year in insurance adjustment (Me. Rev. Stat. Ann. tit. 24-A, § 1853 [West 1995]). The insurance board can investigate any applicant for an insurance adjuster's license and deny an applicant a license if he does not meet the qualifications.
Such rigorous licensing procedures are usually used if the activity places the license holder, or licensee, in a fiduciary relationship, that is, in a position of confidence and trust with other persons. Such activity usually involves the handling of money or health matters, and includes endeavors like medical care, legal representation, accounting, insurance, and financial investment.
Requiring a license for a certain activity allows the government to closely supervise and control the activity. The agency responsible for issuing the license can control the number of licensees. This function is important for activities such as hunting, where the licensing of too many hunters may deplete wildlife populations and put hunters in danger of stray bullets.
A license is not a property right, which means that no one has the absolute right to a license. The government may decline to issue a license when it sees fit to do so, provided that the denial does not violate federal or state law. No agency may decline to issue a license on the basis of race, religion, sex, national origin, or ethnic background.
The denial of a license, the requirement of a license, or the procedures required to obtain a license may be challenged in court. The most frequent court challenges involve licenses pertaining to the operation of a business. Such was the case in FW/PBS v. City of Dallas, 493 U.S. 215, 110 S. Ct. 596, 107 L. Ed. 2d 603 (1990). In FW/PBS three groups of individuals and businesses in the adult entertainment industry filed suit in federal district court challenging a new ordinance passed by the Dallas City Council. The ordinance placed a number of new restrictions on sexually oriented businesses. Among other things it required that owners of sexually oriented businesses obtain a license, renew it each year, and submit to annual inspections.
On appeal, the Supreme Court upheld a requirement that hotels renting rooms for less than ten hours obtain a special license. The Court held that the city of Dallas's evidence that such motels fostered prostitution and led to a deterioration of the neighborhoods in which they existed was adequate justification for the requirement. However, the Court struck down the application of the licensing requirement to businesses engaged in sexually oriented expression, such as adult bookstores, theaters, and cabarets. The activities of these businesses are protected by the First Amendment, and licenses regarding activity protected by the First Amendment must be issued promptly. The Dallas ordinance failed to meet the promptness requirement because it did not limit the time for review of license applications or provide for quick judicial review of license denials. Thus, the Court declared it unconstitutional as applied to businesses engaged in expressive activity.
Private Party Licenses
When a landowner allows a person to do work or perform an act on the landowner's property, the visitor has a license to enter the property. This kind of license need not be signed and formalized: it may be oral or it may be implied by the relationship or actions of the parties. For example, a public utility inspector has a license to enter private property for the purposes of maintaining the utility and gauging consumption. In such a case, the grantor of the license, or licensor, owes a duty to the licensee to make sure the premises are safe for the licensee.
Patent and Copyright Holder Licenses
A license granted by the holder of a patent or a copyright on literary or artistic work gives the license holder a limited right to reproduce, sell, or distribute the work. Likewise, the owner of a trademark may give another person a license to use the mark in a region where the owner's goods have not become known and associated with the owner's use of the mark. These intellectual property licenses usually require that the licensee pay a fee to the licensor in exchange for use of the property. For example, computer software companies sell licenses to their products. In the licensing agreement users are informed that although they possess a disk containing the software, they have actually only purchased a license to operate it. The license typically forbids giving the software to someone else, making copies of it, or running it on more than one computer at a time.
Antoniak, Michael. 1995. 21st Century Entrepreneur: How to Start a Home Business. New York: Avon.
Gellhorn, Walter. 1956. Individual Freedom and Governmental Restraints. Baton Rouge Louisiana State Univ. Press.