The root cause of this failure is identified as an issue with how the license was being checked.
A patch to fix this issue is developed.
The patch can be applied to both ISE and Vivado, and the instructions are bellow.
METHOD 1: Overwriting files in existing Xilinx install area:
a. Original files in the respective directories should be moved or renamed before copying the archived files to these locations.
b. Extract the contents of the '.zip' archive and copy two DLLs to the %Xilinx%\lib\nt64 directory that you are patching.
c. Run ISE software tools from the original install location.
METHOD 2: Creating a separate directory containing patched files:
a. Extract the contents of the '.zip' archive to the desired patch directory location.
b. Set the MYXILINX environment variable to point to this patch directory.
c. Run Vivado software tools from the original install location.
The patch is applicable on ISE 14.7 and Vivado 2013.4. and later.
To obtain the patch files ('.zip' archive), please contact Xylon support via email@example.com.