The terminal services client has been disconnected because its temporary license has expired.

Error: The terminal services client <client> has been disconnected because its temporary license has expired. 

Solution:

This problem may occur if the Licensing Mode in Terminal Services is set to Per Device, the Terminal Server Licensing server only has Per User CALS.

To correct this problem, change the Licensing Mode in Terminal Services Configuration to Per User. To do this, follow these steps:

1. Click Start, point to Administrative Tools, and then click Terminal Services Configuration.
2. Click Server Settings, and then double-click Licensing Mode.
3. Change the Licensing Mode to Per User, and then click OK.

Currently, Window Server 2003 does not manage User CALs. This means that even though there is a User CAL in the license server database, the User CAL will not be decremented when it is used. This does not remove administrators from End User License Agreement (EULA) requirements to have a valid terminal server (TS) CAL for each user. Failure to have a User CAL for each user, if Device CALs are not being used, is a violation of the EULA. In the future, this behavior will be changed and User CALs will be managed.

The following text is from the End User License Agreement (EULA) for Windows Server 2003:

Two different TS CALs are available to you: “Device” and “User.” Each TS Device CAL permits one Device (used by any User) to conduct Windows Sessions on any of your Servers. Each TS User CAL permits one User (using any Device) to conduct Windows Sessions on any of your Servers. You may use a mix of TS Device CALs and TS User CALs simultaneously with the Server Software in your environment. You can have a Terminal Server request Per User licenses or Per Device (default) but not both simultaneously.

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