The License Authorization Process
The license authorization process is broken into nine steps listed below:

Refer to the topic Configuring License Manager for more details.

After configuration, the License Manager reads the license file. The name and location of this file can be set using the License Manager options. The License Manager reads the file from start to finish and processes each license code in order.
All additive and aggregate license codes add to the licensing rights already processed. All exclusive codes override all previously read codes and any future additive codes. Aggregate licenses which have start dates set in the future can still be loaded onto the License Manager; however they cannot be requested or aggregated until their start date has been reached.
If the License Manager cannot find the license file, it will continue to run. When a License Manager is running, it can accept license codes across the network from other programs such as lslic. The License Manager processes each code that is received as if it has just been read from the license file. The License Manager also adds the license code to the end of the license file if it is requested.

If the application supports network licensing, it tries to find a License Manager on one of the following:
>On the same system
>On a specific system in the network
>Via network broadcast for a License Manager
In most of the cases, this will be taken care of by the licensed application. However, your software vendor may instruct you to set the specific License Manager host using the LSFORCEHOST environment variable or traverse through various License Managers using the LSHOST environment variable.
Refer to Client - Commonly Used Variables for more details.

Once the application has identified the License Manager, it issues a request for one or more licenses to the License Manager. The host name is translated to the network address of the License Manager's computer. The application sends a license request to this address and the License Manager’s port.

When a License Manager receives a license request, it verifies if a license can be granted based on the current license codes. If it can, then an authorization is sent back to the client machine. Otherwise, the request is rejected and a denial is sent back to the client machine.
NOTE In both cases, the activity can be logged to a file if the capability to do this has been enabled.

Each license code specifies the maximum time period for which a license can be held by an application without renewal. After a client has received a license, it must periodically request a license renewal from the License Manager.
When a license is forcibly renewed, it enables the License Manager to reclaim the license if there is a problem with the application or client machine. If the application does not renew the license within the allowed time, it loses its license and the License Manager may grant it to another user.
NOTE This action is handled by the application and is visible to the user working on the client machine.

The License Manager responds to a license renewal request in the same manner as the initial license request as discussed in Step 5.

When an application ends, it sends a message back to the License Manager indicating that the license is no longer needed. This lets the License Manager immediately reclaim the license and make it available to another user.
NOTE Usually, the license will be released automatically after some time if the licensed application does not send an update to the License Manager for long or faces a network issue. This will help in making the licenses available for further requests.

When the License Manager receives the license authorization back, it makes it available to another user.