Hello Ian, first, to look up your license file I would need your email address, you can send it to me as a private message if you do not want to publish it here.
Other then that, it is a bit hard to understand what went wrong.
When you launch Espionage for the first time it will ask you to set the master password. This is the password you will be using to unlock Espionage on subsequent launches, so that you have access to unlock/lock options for protected folders.
So maybe you misunderstood the set requirement thinking it is asking you to unlock it.
In any case, it is fairly simple to reset Espionage if you did not protect any folders so far, just quit Espionage, switch to FInder, hold down the option key, and select Library from the Finder's Go menu, once in LIbrary, navigate further to Application Support folder and then look for com.taeffect.Espionage3 folder, rename it to any other name.
Now launch Espionage and it will start from scratch, ie. it will ask you to set the password.
BTW, the license file is not supposed to be opened, instead, read the email the license file came with, for instructions how to apply the license file.
If you get stuck, just let me know.
Rgds
Zsolt