The license agreement can be seen as the knowledge source for a license management system. As such, it may be referenced by the system each time a new process is initiated. To facilitate access, a machine readable representation of the license agreement is highly desirable, but at the same time we do not want to sacrifice too much readability of such agreements by human beings. Creating an ontology as a formal knowledge representation of licensing not only meets the representation requirements, but also offers improvements to knowledge reusability owing to the inherent sharing nature of such representations. Furthermore, the XML-based ontology languages such as OWL (Web Ontology Language) can be user friendly for the non-developers who are often those responsible for implementing and managing such license agreements. This paper shows our use of ontology to represent the license agreement in a development prototype. The ultimate goal is to build ontology for the license management domain that will facilitate autonomic knowledge management. Knowledge based on such ontology can then be shared and utilized by many types of license management system.