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As per Wikipedia, a license is 'a promise by the licensor not to sue the licensee'. In practice, licenses are used to allow third parties permission to use copyrighted material with permission of the copyright holder. The license fee may compensate for this copyright infringement, but there are also licenses (like GPL) that release material for free.

What the licensee is permitted do with the copyrighted material depends on the license. This varies from using the material as-is, to heavily modifying it and re-selling it for profit.

Since many legislations define copyright to be held by a creator by default, there are even licenses to waive any kind of copyright.

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