Proprietary software


Proprietary software is software that grants its creator, publisher, or other rightsholder or rightsholder partner a legal monopoly by modern copyright and intellectual property law to exclude the recipient from freely sharing the software or modifying it, and—in some cases, as is the case with some patent-encumbered and EULA-bound software—from making use of the software on their own, thereby restricting their freedoms.
Proprietary software is a subset of non-free software, a term defined in contrast to free and open-source software; non-commercial licenses such as CC BY-NC are not deemed proprietary, but are non-free. Proprietary software may either be closed-source software or source-available software.

Origin

Until the late 1960s, computers—especially large and expensive mainframe computers, machines in specially air-conditioned computer rooms—were usually leased 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 the public without charge. Closed source means computer programs whose source code is not published except to licensees. It is available to be modified 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. The Commission on New Technological Uses of Copyrighted Works concluded in 1978 with the recommendations that became the Computer Software Copyright Act of 1980.
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.
Examples of proprietary operating systems include Microsoft Windows, Classic Mac OS, macOS, iOS and iPadOS.

Types

Licenses

Mixed-source software

Software distributions considered as proprietary may in fact incorporate a "mixed source" model including both free and non-free software in the same distribution. Most if not all so-called proprietary UNIX distributions are mixed source software, bundling open-source components like BIND, Sendmail, X Window System, DHCP, and others along with a purely proprietary kernel and system utilities.

Multi-licensing

Some free software packages are also simultaneously available under proprietary terms. Examples include MySQL, Sendmail and ssh. The original copyright holders for a work of free software, even copyleft free software, can use dual-licensing to allow themselves or others to redistribute proprietary versions. Non-copyleft free software allows anyone to make proprietary redistributions. Free software that depends on proprietary software is considered "trapped" by the Free Software Foundation. This includes software written only for Microsoft Windows, or software that could only run on Java, before it became free 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. The user may agree to this contract in writing, interactively on screen, or by opening the box containing the software. 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 proprietary software is routinely handled as a trade secret. Software can be made available with fewer restrictions on licensing or source-code access; software that satisfies certain conditions of freedom and openness 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 the 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 can be installed on one computer, and limits the number of network file sharing connections to 10. The Home Edition disables features present in Windows XP Professional.
  • Traditionally, Adobe licenses are limited to one user, but allow the user to install a second copy on a home computer or laptop. This is no longer true with the switching to Creative Cloud.
  • iWork '09, Apple's productivity suite, is available in a five-user family pack, for use on up to five computers in a household.

    Inspection and modification of source code

Vendors typically distribute proprietary software in compiled form, usually the machine language understood by the computer's central processing unit. They typically retain the source code, or human-readable version of the software, often written in a higher level programming language. This scheme is often referred to as closed source.
While most proprietary software is distributed without the source code, some vendors distribute the source code or otherwise make it available to customers. For example, users who have purchased a license for the Internet forum software vBulletin can modify the source for their own site but cannot redistribute it. This is true for many web applications, which must be in source code form when being run by a web server. The source code is covered by a non-disclosure agreement or a license that allows, for example, study and modification, but not redistribution. The text-based email client Pine and certain implementations of Secure Shell are distributed with proprietary licenses that make the source code available.Some licenses for proprietary software allow distributing changes to the source code, but only to others licensed for the product, and some of those modifications are eventually picked up by the vendor.
Some governments fear that proprietary software may include defects or malicious features which would compromise sensitive information. In 2003 Microsoft established a Government Security Program to allow governments to view source code and Microsoft security documentation, of which the Chinese government was an early participant. The program is part of Microsoft's broader Shared Source Initiative which provides source code access for some products. The Reference Source License and Limited Public License are proprietary software licenses where the source code is made available.
Governments have also been accused of adding such malware to software themselves. According to documents released by Edward Snowden, the NSA has used covert partnerships with software companies to make commercial encryption software exploitable to eavesdropping, or to insert backdoors.
Software vendors sometimes use obfuscated code to impede users who would reverse engineer the software. This is particularly common with certain programming languages. For example, the bytecode for programs written in Java can be easily decompiled to somewhat usable code, and the source code for programs written in scripting languages such as PHP or JavaScript is available at run time.

Redistribution

Proprietary software vendors can prohibit the users from sharing the software with others. Another unique license is required for another party to use the software.
In the case of proprietary software with source code available, the vendor may also prohibit customers from distributing their modifications to the source code.
Shareware is closed-source software whose owner encourages redistribution at no cost, but which the user sometimes must pay to use after a trial period. The fee usually allows use by a single user or computer. In some cases, software features are restricted during or after the trial period, a practice sometimes called crippleware.