The Licensor was "the second-most evil creature in the universe".
The head of the Licensed Reality Corporation, he enlisted Autons and Sontarans (as well as Cyberons) in his maniacal desire to stamp out anything unlicensed from the face of the universe. His efforts caused a disturbance in the balance of accepted canonicity, which disturbed Rassilon. Rassilon put the Foot Doctor on the case, and the Chrono-Baron, with the help of his new companion the Salesman, tricked the Licensor into landing on Unlicensed Earth. As by the Licensor's own rules nothing on Unlicensed Earth existed, this destroyed him. (NOTVALID: Do You Have a Licence to Save this Planet?)
Behind the scenes
Nigel Fairs confirmed in Downtime – The Lost Years of Doctor Who that he intended for the Licensor to come across as a parody of Anthony Ainley's version of the Master (which is somewhat ironic, as this means the Licensor is himself one of the unlicensed parodies which he so ruthlessly antagonises in-universe). He also recalled how the gag where the Licensor's costume visibly gets more extravagant by the minute while a rising "camp-o-meter" appears in the corner of the screen initially arose from a misunderstanding: Fairs had presented Bill Baggs with a selection of possible costumes of varying levels of campiness, only for Baggs to get the impression that Fairs wanted him to write in a reason to wear every one of them.