This errror occurs when the network license manager is installed in a your path that has a folder with spaces such as Program Files. When this is the case, the DAEMON line in the license file must specify the path to mlm.exe with double quotes. If you do not put quotes in the path, the license manager will be unable to find the mlm.exe file.
To resolve this issue, open the license.dat file for the license manager and locate the DAEMON line. Enclose the path to the mlm.exe in quotes. For example:
DAEMON MLM "C:\Program Files\MATLAB\R2007b\flexlm\mlm.exe"
Once updated, Stop and restart the license manager to resolve the issue.
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