Services enable the transformation of the World Wide Web as distributed interoperable systems interacting beyond organizational boundaries. Service licensing enables broader usage of services and a means for designing business strategies and relationships. A service license describes the terms and conditions for the use and access of the service in a machine interpretable way that services could be able to understand. Service-based applications are largely grounded on composition of independent services. In that scenario, license compatibility is a complex issue, requiring careful attention before attempting to merge licenses. The permissions and the prohibitions imposed by the licenses of services would deeply impact the composition. Thus, service licensing requires a comprehensive analysis on composition of these rights and requirements conforming to the nature of operations performed and compensation of services used in composition. In this paper, we analyze the compatibility of service license by describing a matchmaking algorithm. Further, we illustrate the composability of service licenses by creating a composite service license, that is compatible with the licenses being composed.