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We had an interesting case recently where one of our customers was getting this error – that license is invalid. He had a valid license that wasn’t invalid on a TFS 2013 server.
We tried re-applying the license a couple of times using the TFSConfig license command. We didn’t get any error there too and the license was accepted.

After a lot of looking around we found the issue was due to a simple application pool configuration.
The customer had set “Enable 32-Bit Applications” to true. This meant the application pool’s worker process would be in WOW64 mode used to run 32 bit applications on the 64 bit OS.

TFS is a 64 bit application and doesn’t work well with a worker process in WOW64 mode.
Disabling this helped us fix the issue.

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Content created by Venkata Narasimhan
Content reviewed by Romit Gulati