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Proprietary software, also known as non-free software or closed-source software, is computer software for which the software's publisher or another person reserves some rights from licenses to use, modify, share modifications, or share the software. It is the opposite of
open-source Open source is source code that is made freely available for possible modification and redistribution. Products include permission to use the source code, design documents, or content of the product. The open-source model is a decentralized softwar ...
or
free software Free software (or libre software) is computer software distributed under terms that allow users to run the software for any purpose as well as to study, change, and distribute it and any adapted versions. Free software is a matter of liberty ...
. Non-free software sometimes includes
patent A patent is a type of intellectual property that gives its owner the legal right to exclude others from making, using, or selling an invention for a limited period of years in exchange for publishing an sufficiency of disclosure, enabling disclo ...
rights.


Types


Origin

Until the late 1960s computers—large and expensive
mainframe computer A mainframe computer, informally called a mainframe or big iron, is a computer used primarily by large organizations for critical applications like bulk data processing for tasks such as census, censuses, industry and consumer statistics, ent ...
s, machines in specially air-conditioned computer rooms—were usually
lease A lease is a contract A contract is a legally binding agreement that defines and governs the rights and duties between or among its parties Image:'Hip, Hip, Hurrah! Artist Festival at Skagen', by Peder Severin Krøyer (1888) Demisted wi ...

lease
d to customers rather than . Service and all software available were usually supplied by manufacturers without separate charge until 1969. Computer vendors usually provided the source code for installed software to customers. Customers who developed software often made it available to others without charge. Closed source means computer programs whose source code is not published except to licensees. It is available to be edited only by the organization that developed it and those licensed to use the software. In 1969, IBM, which had
antitrust Competition law is a law Law is a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole. A system, surrounded and influenced by its environment, is ...
lawsuits pending against it, led an industry change by starting to charge separately for mainframe software and services, by unbundling hardware and software.
Bill Gates William Henry Gates III (born October 28, 1955) is an American business magnate A business magnate is someone who has achieved great success and enormous wealth through the ownership of multiple lines of enterprise. The term characterist ...
' "
Open Letter to Hobbyists The Open Letter to Hobbyists is a 1976 open letter An open letter is a letter Letter, letters, or literature may refer to: Characters typeface * Letter (alphabet) A letter is a segmental symbol A symbol is a mark, sign, or word that ...
" in 1976 decried computer hobbyists' rampant
copyright infringement Copyright infringement (at times referred to as piracy) is the use of works Works may refer to: People * Caddy Works Pierce "Caddy" Works (January 2, 1896 – July 19, 1982) was an American basketball and baseball coach. He was the head ba ...
of software, particularly Microsoft's
Altair BASIC Altair BASIC is a discontinued interpreter for the BASIC programming language BASIC (Beginners' All-purpose Symbolic Instruction Code) is a family of general-purpose, high-level programming language In computer science Computer science ...
interpreter, and asserted that their unauthorized use hindered his ability to produce quality software. But the legal status of
software copyrightSoftware copyright is the application of copyright Copyright is a type of intellectual property that gives its owner the exclusive right to make copies of a creative work, usually for a limited time. The creative work may be in a literary, art ...
, especially for
object code In computing Computing is any goal-oriented activity requiring, benefiting from, or creating computing machinery. It includes the study and experimentation of algorithmic processes and development of both computer hardware , hardware and softw ...
, was not clear until the 1983 appeals court ruling in Apple Computer, Inc. v. Franklin Computer Corp. According to
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, via juggle.com. accessed Novembe ...

Brewster Kahle
the legal characteristic of software changed also due to the U.S.
Copyright Act of 1976 The Copyright Act of 1976 is a United States The United States of America (USA), commonly known as the United States (U.S. or US), or America, is a country Contiguous United States, primarily located in North America. It consists of 50 U.S. ...
.Robert X
Cringely's interview with Brewster Kahle
46th minute
Starting in February 1983 IBM adopted an " object-code-only" model for a growing list of their software and stopped shipping much of the source code, even to licensees. In 1983, binary software became copyrightable in the
United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily located in North America. It consists of 50 U.S. state, states, a Washington, D.C., ...

United States
as well by the
Apple vs. Franklin An apple is an edible fruit produced by an apple tree (''Malus domestica''). Apple fruit tree, trees are agriculture, cultivated worldwide and are the most widely grown species in the genus ''Malus''. The tree originated in Central Asia, wher ...
law decision, before which only source code was copyrightable. Additionally, the growing availability of millions of computers based on the same microprocessor architecture created for the first time an unfragmented and big enough market for binary distributed software.


Legal basis

Most of the software is covered by
copyright Copyright is a type of intellectual property Intellectual property (IP) is a category of property Property is a system of rights that gives people legal control of valuable things, and also refers to the valuable things themselves. ...
which, along with
contract law A contract is a legally binding agreement that defines and governs the rights and duties between or among its parties Image:'Hip, Hip, Hurrah! Artist Festival at Skagen', by Peder Severin Krøyer (1888) Demisted with DXO PhotoLab Clearview; ...

contract law
,
patents A patent is a type of intellectual property Intellectual property (IP) is a category of property Property is a system of rights that gives people legal control of valuable things, and also refers to the valuable things themselves. Depe ...
, and
trade secret Trade secrets are a type of intellectual property that comprise formulas, best practice, practices, business process, processes, designs, legal instrument, instruments, patterns, or compilations of information that have inherent economic value be ...
s, provides legal basis for its owner to establish exclusive rights. A software vendor delineates the specific terms of use in an
end-user license agreement An end-user license agreement (EULA, ) is a legal contract entered into between a software developer A computer programmer, sometimes called a software developer, a programmer or more recently a coder (especially in more informal contexts), is ...
(EULA). The user may agree to this contract in writing, interactively on screen (
clickwrapA clickwrap or clickthrough agreementAgreement may refer to: Agreements between people and organizations * Gentlemen's agreement A gentlemen's agreement, or gentleman's agreement, is an informal and legally non-binding wikt:agreement, agreement be ...
), or by opening the box containing the software ( shrink wrap licensing). License agreements are usually not negotiable.
Software patent A software patent is a patent NPOV disputes from March 2021 A patent is a Title (property), title that gives its owner the legal right to exclude others from making, using, or selling an invention for a limited period of years in exchange fo ...
s grant exclusive rights to algorithms, software features, or other
patentable subject matter Patentable, statutory or patent-eligible subject matter is subject matter which is susceptible of patent NPOV disputes from March 2021 A patent is a Title (property), title that gives its owner the legal right to exclude others from making, us ...
, with coverage varying by jurisdiction. Vendors sometimes grant patent rights to the user in the license agreement. The
source code In computing Computing is any goal-oriented activity requiring, benefiting from, or creating computing machinery. It includes the study and experimentation of algorithmic processes and development of both computer hardware , hardware and ...

source code
for a piece of software is routinely handled as a
trade secret Trade secrets are a type of intellectual property that comprise formulas, best practice, practices, business process, processes, designs, legal instrument, instruments, patterns, or compilations of information that have inherent economic value be ...
. Occasionally, software is made available with fewer restrictions on licensing or source-code access; such software is known as "
free Free may refer to: Concept * Freedom, having the ability to act or change without constraint * Emancipate, to procure political rights, as for a disenfranchised group * Free will, control exercised by rational agents over their actions and decis ...
" or "
open-source Open source is source code that is made freely available for possible modification and redistribution. Products include permission to use the source code, design documents, or content of the product. The open-source model is a decentralized softwar ...
."


Limitations

Since license agreements do not override applicable
copyright law Copyright is a type of intellectual property that gives its owner the exclusive right to copy and distribute a creative work, usually for a limited time. The creative work may be in a literary, artistic, educational, or musical form. Copyrigh ...

copyright law
or
contract law A contract is a legally binding agreement that defines and governs the rights and duties between or among its parties Image:'Hip, Hip, Hurrah! Artist Festival at Skagen', by Peder Severin Krøyer (1888) Demisted with DXO PhotoLab Clearview; ...

contract law
, provisions in conflict with applicable law are not enforceable. Some software is specifically licensed and not sold, in order to avoid limitations of copyright such as the
first-sale doctrine The first-sale doctrine (also sometimes referred to as the "right of first sale" or the "first sale rule") is an American legal concept that limits the rights of an intellectual property Intellectual property (IP) is a category of property t ...
.


Exclusive rights

The owner of proprietary software exercises certain
exclusive right In Anglo-Saxon law Anglo-Saxon law (Old English Old English (, ), or Anglo-Saxon, is the earliest recorded form of the English language English is a West Germanic languages, West Germanic language first spoken in History of Anglo-Saxon ...
s over the software. The owner can restrict use, inspection of source code, modification of source code, and redistribution.


Use of the software

Vendors typically limit the number of computers on which software can be used, and prohibit the user from installing the software on extra computers. Restricted use is sometimes enforced through a technical measure, such as
product activation Product activation is a license validation procedure required by some proprietary computer A computer is a machine that can be programmed to carry out sequences of arithmetic or logical operations automatically. Modern computers can perfor ...
, a
product key A product key, also known as a software key, is a specific software-based key for a computer program A computer program is a collection of instructions that can be executed by a computer to perform a specific task. A computer program is usua ...
or serial number, a , or
copy protection Copy protection, also known as content protection, copy prevention and copy restriction, describes measures to enforce copyright Copyright is a type of intellectual property Intellectual property (IP) is a category of property that in ...
. Vendors may also distribute versions that remove particular features, or versions which allow only certain fields of endeavor, such as non-commercial, educational, or non-profit use. Use restrictions vary by license: * Windows Vista Starter is restricted to running a maximum of three concurrent applications. * The retail edition of Microsoft Office Home and Student 2007 is limited to non-commercial use on up to three devices in one household. *
Windows XP Windows XP is a major release of the Windows NT Windows NT is a proprietary {{Short pages monitor Proponents of commercial proprietary software argue that requiring users to pay for software as a product increases funding or time available for the
research and development Research and development (R&D, R+D), known in Europe Europe is a continent A continent is any of several large landmasses. Generally identified by convention (norm), convention rather than any strict criteria, up to seven geogra ...
of software. For example,
Microsoft Microsoft Corporation is an American multinational corporation, multinational technology company, technology corporation which produces Software, computer software, consumer electronics, personal computers, and related services. Its best-know ...

Microsoft
says that per-copy fees maximise the profitability of software development. Proprietary software generally creates greater commercial activity over free software, especially in regard to market revenues. Proprietary software is often sold with a license that gives the end user right to use the software.


Examples

Examples of proprietary software include
Microsoft Windows Microsoft Windows, commonly referred to as Windows, is a group of several proprietary {{Short pages monitor