proprietary software

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 or free software. Non-free software sometimes includes patent rights.

Types

Origin

Until the late 1960s computers—large and expensive mainframe computers, machines in specially air-conditioned computer rooms—were usually

lease

d to customers rather than

sold

.

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 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' "Open Letter to Hobbyists" in 1976 decried computer hobbyists' rampant copyright infringement of software, particularly Microsoft's Altair BASIC interpreter, and asserted that their unauthorized use hindered his ability to produce quality software. But the legal status of software copyright, especially for object code, was not clear until the 1983 appeals court ruling in Apple Computer, Inc. v. Franklin Computer Corp.

According to

Brewster Kahle

the legal characteristic of software changed also due to the U.S. Copyright Act of 1976.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

as well by the Apple vs. Franklin 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 which, along with

contract law

, patents, and trade secrets, 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 (EULA). The user may agree to this contract in writing, interactively on screen (clickwrap), or by opening the box containing the software ( shrink wrap licensing). License agreements are usually not negotiable. Software patents grant exclusive rights to algorithms, software features, or other patentable subject matter, with coverage varying by jurisdiction. Vendors sometimes grant patent rights to the user in the license agreement. The

source code

for a piece of software is routinely handled as a trade secret. Occasionally, software is made available with fewer restrictions on licensing or source-code access; such software is known as "free" or "open-source."

Limitations

Since license agreements do not override applicable

copyright law

or

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.

Exclusive rights

The owner of proprietary software exercises certain exclusive rights 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, a product key or serial number, a

hardware key

, or copy protection.

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