Service licensing enables a broader usage of services and a means for designing business strategies and relationships. A service license describes the terms and conditions that permit the use of and access to a service, in a machine interpretable way, which services can understand. The distribution of services spanning across organizational boundaries raises problems related to intellectual value that are less explored in service-oriented research. Being a way to manage the rights between service consumers and service providers, licenses become significant in services. As the nature of services differs significantly from traditional software and components, services prevent the direct adoption of software and component licenses. The concept of preserving certain rights of owner and presenting certain rights to consumer, addressed by service licensing, is incipient in the field of service-oriented computing. We propose a formalization of licensing clauses for an unambiguous definition of a service license. We extend the Open Digital Rights Language to implement the clauses of service licensing, in a machine interpretable way. We illustrate the concepts of service licensing based on a case study of service license compliance verification in a real world scenario. © 2011 Springer-Verlag London Limited.