Proprietary software

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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. [1]

Contents

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. [1] [2]

Types

Free/Open Licenses Non-free Licenses
Public domain & equivalents Permissive license Copyleft (protective license) Noncommercial license Proprietary license Trade secret
SoftwarePD, CC0 BSD, MIT, Apache GPL, AGPL JRL, AFPL proprietary software, no public licenseprivate, internal software
Other creative worksPD, CC0 CC BY CC BY-SA CC BY-NC Copyright, no public licenseunpublished

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. [3] [4] 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.[ citation needed ] Customers who developed software often made it available to the public without charge. [5] 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 [6] [7] and services, by unbundling hardware and software. [8]

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. [9] [10] [11]

According to Brewster Kahle the legal characteristic of software changed also due to the U.S. Copyright Act of 1976. [12]

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, [13] [14] even to licensees.

In 1983, binary software became copyrightable in the United States as well by the Apple vs. Franklin law decision, [15] before which only source code was copyrightable. [16] 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. [16]

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. [17] 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. [18] [19]

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 (i.e. software distributed under a permissive free software license or released to the public domain) allows anyone to make proprietary redistributions. [20] [21] Free software that depends on proprietary software is considered "trapped" by the Free Software Foundation. This includes software written only for Microsoft Windows, [22] or software that could only run on Java, before it became free software. [23]

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. [24]

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. [25] 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. [26] The source code for a piece of proprietary software is routinely handled as a trade secret. [27] 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." [28]

Limitations

Since license agreements do not override applicable copyright law or contract law, provisions in conflict with applicable law are not enforceable. [29] Some software is specifically licensed and not sold, in order to avoid limitations of copyright such as the first-sale doctrine. [30]

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.[ citation needed ] 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:

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. [34] This scheme is often referred to as closed source. [35]

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. [36] The text-based email client Pine and certain implementations of Secure Shell are distributed with proprietary licenses that make the source code available.[ citation needed ]Some licenses for proprietary software allow distributing changes to the source code, but only to others licensed for the product, and some [37] 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 (GSP) to allow governments to view source code and Microsoft security documentation, of which the Chinese government was an early participant. [38] [39] The program is part of Microsoft's broader Shared Source Initiative which provides source code access for some products. The Reference Source License (Ms-RSL) and Limited Public License (Ms-LPL) 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. [40] [41]

Software vendors sometimes use obfuscated code to impede users who would reverse engineer the software. [42] This is particularly common with certain programming languages.[ citation needed ] For example, the bytecode for programs written in Java can be easily decompiled to somewhat usable code,[ citation needed ] and the source code for programs written in scripting languages such as PHP or JavaScript is available at run time. [43]

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.

Interoperability with software and hardware

Proprietary file formats and protocols

Proprietary software often[ citation needed ] stores some of its data in file formats that are incompatible with other software, and may also communicate using protocols which are incompatible. Such formats and protocols may be restricted as trade secrets or subject to patents.[ citation needed ]

Proprietary APIs

A proprietary application programming interface (API) is a software library interface "specific to one device or, more likely to a number of devices within a particular manufacturer's product range." [44] The motivation for using a proprietary API can be vendor lock-in or because standard APIs do not support the device's functionality. [44]

The European Commission, in its March 24, 2004, decision on Microsoft's business practices, [45] quotes, in paragraph 463, Microsoft general manager for C++ development Aaron Contorer as stating in a February 21, 1997, internal Microsoft memo drafted for Bill Gates:

The Windows API is so broad, so deep, and so functional that most ISVs would be crazy not to use it. And it is so deeply embedded in the source code of many Windows apps that there is a huge switching cost to using a different operating system instead.

Early versions of the iPhone SDK were covered by a non-disclosure agreement. The agreement forbade independent developers from discussing the content of the interfaces. Apple discontinued the NDA in October 2008. [46]

Vendor lock-in

Any dependency on the future versions and upgrades for a proprietary software package can create vendor lock-in, entrenching a monopoly position. [47]

Software limited to certain hardware configurations

Proprietary software may also have licensing terms that limit the usage of that software to a specific set of hardware. Apple has such a licensing model for macOS, an operating system which is limited to Apple hardware, both by licensing and various design decisions. This licensing model has been affirmed by the United States Court of Appeals for the Ninth Circuit. [48]

Abandonment by proprietors

Proprietary software which is no longer marketed, supported or sold by its owner is called abandonware, the digital form of orphaned works. If the proprietor of a software package should cease to exist, or decide to cease or limit production or support for a proprietary software package, recipients and users of the package may have no recourse if problems are found with the software. Proprietors can fail to improve and support software because of business problems. [49] Support for older or existing versions of a software package may be ended to force users to upgrade and pay for newer versions [50] (planned obsolescence). Sometimes another vendor or a software's community themselves can provide support for the software, or the users can migrate to either competing systems with longer support life cycles or to FOSS-based systems. [51]

Some proprietary software is released by their owner at end-of-life as open-source or source available software, often to prevent the software from becoming unsupported and unavailable abandonware. [52] [53] [54] 3D Realms and id Software are famous for the practice of releasing closed source software into the open source.[ further explanation needed ] Some of those kinds are free-of-charge downloads (freeware), some are still commercially sold (e.g. Arx Fatalis).[ further explanation needed ] More examples of formerly closed-source software in the List of commercial software with available source code and List of commercial video games with available source code.

Pricing and economics

Proprietary software is not synonymous with commercial software, [55] [56] although the two terms are sometimes used synonymously in articles about free software. [57] [58] Proprietary software can be distributed at no cost or for a fee, and free software can be distributed at no cost or for a fee. [59] The difference is that whether proprietary software can be distributed, and what the fee would be, is at the proprietor's discretion. With free software, anyone who has a copy can decide whether, and how much, to charge for a copy or related services. [60]

Proprietary software that comes for no cost is called freeware.

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 of software. For example, Microsoft says that per-copy fees maximize the profitability of software development. [61]

Proprietary software generally creates greater commercial activity over free software, especially in regard to market revenues. [62] Proprietary software is often sold with a license that gives the end user right to use the software.

See also

Related Research Articles

<span class="mw-page-title-main">Free software</span> Software licensed to be freely used, modified and distributed

Free software, libre software, libreware sometimes known as freedom-respecting 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, not price; all users are legally free to do what they want with their copies of a free software regardless of how much is paid to obtain the program. Computer programs are deemed "free" if they give end-users ultimate control over the software and, subsequently, over their devices.

<span class="mw-page-title-main">Open-source license</span> Software license allowing source code to be used, modified, and shared

Open-source licenses are software licenses that allow content to be used, modified, and shared. They facilitate free and open-source software (FOSS) development. Intellectual property (IP) laws restrict the modification and sharing of creative works. Free and open-source licenses use these existing legal structures for an inverse purpose. They grant the recipient the rights to use the software, examine the source code, modify it, and distribute the modifications. These criteria are outlined in the Open Source Definition.

<span class="mw-page-title-main">End-user license agreement</span> Software License Agreements

An end-user license agreement or EULA is a legal contract between a software supplier and a customer or end-user.

In economics, vendor lock-in, also known as proprietary lock-in or customer lock-in, makes a customer dependent on a vendor for products, unable to use another vendor without substantial switching costs.

<span class="mw-page-title-main">Open-source software</span> Software licensed to ensure source code usage rights

Open-source software (OSS) is computer software that is released under a license in which the copyright holder grants users the rights to use, study, change, and distribute the software and its source code to anyone and for any purpose. Open-source software may be developed in a collaborative, public manner. Open-source software is a prominent example of open collaboration, meaning any capable user is able to participate online in development, making the number of possible contributors indefinite. The ability to examine the code facilitates public trust in the software.

Software copyright is the application of copyright in law to machine-readable software. While many of the legal principles and policy debates concerning software copyright have close parallels in other domains of copyright law, there are a number of distinctive issues that arise with software. This article primarily focuses on topics particular to software.

Commercial software, or seldom payware, is a computer software that is produced for sale or that serves commercial purposes. Commercial software can be proprietary software or free and open-source software.

<span class="mw-page-title-main">Software license</span> Governs the use and/or redistribution of software

A software license is a legal instrument governing the use or redistribution of software.

In a series of legal disputes between SCO Group and Linux vendors and users, SCO alleged that its license agreements with IBM meant that source code IBM wrote and donated to be incorporated into Linux was added in violation of SCO's contractual rights. Members of the Linux community disagreed with SCO's claims; IBM, Novell, and Red Hat filed claims against SCO.

Retail software is computer software, typically installed on PC-type computers post 2005, delivered via the Internet. Traditionally this software was delivered via physical data storage media sold to end consumer but very few companies still provide their software using physical media. The software is typically sold under restricted licenses or in the case of cloud-based software sold as a Software-as-a-Service (SaaS) model.

<span class="mw-page-title-main">Free and open-source software</span> Software whose source code is available and which is permissively licensed

Free and open-source software (FOSS) is software that is available under a license that grants the right to use, modify, and distribute the software, modified or not, to everyone free of charge. The public availability of the source code is, therefore, a necessary but not sufficient condition. FOSS is an inclusive umbrella term for free software and open-source software. FOSS is in contrast to proprietary software, where the software is under restrictive copyright or licensing and the source code is hidden from the users.

Free/open-source software – the source availability model used by free and open-source software (FOSS) – and closed source are two approaches to the distribution of software.

Multi-licensing is the practice of distributing software under two or more different sets of terms and conditions. This may mean multiple different software licenses or sets of licenses. Prefixes may be used to indicate the number of licenses used, e.g. dual-licensed for software licensed under two different licenses.

<span class="mw-page-title-main">History of free and open-source software</span>

The history of free and open-source software begins at the advent of computer software in the early half of the 20th century. In the 1950s and 1960s, computer operating software and compilers were delivered as a part of hardware purchases without separate fees. At the time, source code—the human-readable form of software—was generally distributed with the software, providing the ability to fix bugs or add new functions. Universities were early adopters of computing technology. Many of the modifications developed by universities were openly shared, in keeping with the academic principles of sharing knowledge, and organizations sprung up to facilitate sharing.

Companies whose business centers on the development of open-source software employ a variety of business models to solve the challenge of making profits from software that is under an open-source license. Each of these business strategies rest on the premise that users of open-source technologies are willing to purchase additional software features under proprietary licenses, or purchase other services or elements of value that complement the open-source software that is core to the business. This additional value can be, but not limited to, enterprise-grade features and up-time guarantees to satisfy business or compliance requirements, performance and efficiency gains by features not yet available in the open source version, legal protection, or professional support/training/consulting that are typical of proprietary software applications.

<span class="mw-page-title-main">Copyleft</span> Practice of mandating free use in all derivatives of a work

Copyleft is the legal technique of granting certain freedoms over copies of copyrighted works with the requirement that the same rights be preserved in derivative works. In this sense, freedoms refers to the use of the work for any purpose, and the ability to modify, copy, share, and redistribute the work, with or without a fee. Licenses which implement copyleft can be used to maintain copyright conditions for works ranging from computer software, to documents, art, and scientific discoveries, and similar approaches have even been applied to certain patents.

<span class="mw-page-title-main">GNU General Public License</span> Series of free software licenses

The GNU General Public Licenses are a series of widely used free software licenses, or copyleft licenses, that guarantee end users the freedoms to run, study, share, and modify the software. The GPL was the first copyleft license for general use. It was originally written by Richard Stallman, the founder of the Free Software Foundation (FSF), for the GNU Project. The license grants the recipients of a computer program the rights of the Free Software Definition. The licenses in the GPL series are all copyleft licenses, which means that any derivative work must be distributed under the same or equivalent license terms. It is more restrictive than the Lesser General Public License and even further distinct from the more widely-used permissive software licenses such as BSD, MIT, and Apache.

<span class="mw-page-title-main">Software categories</span> Groups of software

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<span class="mw-page-title-main">Linspire</span> Linux distribution

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Open source license litigation involves lawsuits surrounding open-source licensed software. Many of the legal rights of open source software licensors enforceable against users violating licensing agreements are untested by the U.S. legal system. Free and open source software (FOSS) is distributed under a variety of free-software licenses, which are unique among other software licenses. Legal action against open source licenses involves questions about their validity and enforceability.

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  52. ↑ Bell, John (October 1, 2009). "Opening the Source of Art". Technology Innovation Management Review. Archived from the original on March 30, 2014. Retrieved May 2, 2022. that no further patches to the title would be forthcoming. The community was predictably upset. Instead of giving up on the game, users decided that if Activision wasn't going to fix the bugs, they would. They wanted to save the game by getting Activision to open the source so it could be kept alive beyond the point where Activision lost interest. With some help from members of the development team that were active on fan forums, they were eventually able to convince Activision to release Call to Power II's source code in October of 2003.
  53. ↑ Wen, Howard (June 10, 2004). "Keeping the Myths Alive". Linux Dev Center. Archived from the original on April 6, 2013. Retrieved December 22, 2012. fans of the Myth trilogy have taken this idea a step further: they have official access to the source code for the Myth games. Organized under the name MythDevelopers, this all-volunteer group of programmers, artists, and other talented people devote their time to improving and supporting further development of the Myth game series.
  54. ↑ Largent, Andy (October 8, 2003). "Homeworld Source Code Released". Inside Mac Games. Archived from the original on October 12, 2013. Retrieved November 24, 2012. With the release of Homeworld 2 for the PC, Relic Entertainment has decided to give back to their impressive fan community by releasing the source code to the original Homeworld.
  55. ↑ Rosen, Lawrence (2004). Open Source Licensing . Upper Saddle River: Prentice Hall. pp.  52, 255, 259. ISBN   978-0-13-148787-1.
  56. ↑ Havoc Pennington (2008-03-02). "Debian Tutorial". Archived from the original on 2018-01-29. Retrieved 2009-06-04. It is important to distinguish commercial software from proprietary software. Proprietary software is non-free software, while commercial software is software sold for money.
  57. ↑ Russell McOrmond (2000-01-04). "What is "Commercial Software"?". Archived from the original on 2012-10-04. Retrieved 2009-05-02.
  58. ↑ Michael K. Johnson (1996-09-01). "Licenses and Copyright" . Retrieved 2009-06-16. If you program for Linux, you do need to understand licensing, no matter if you are writing free software or commercial software.
  59. ↑ Eric S. Raymond (2003-12-29). "Proprietary, Jargon File" . Retrieved 2009-06-12. Proprietary software should be distinguished from commercial software. It is possible for the software to be commercial [...] without being proprietary. The reverse is also possible, for example in binary-only freeware.
  60. ↑ "Selling Free Software". GNU Project.
  61. ↑ "The Commercial Software Model". Microsoft. May 2001. Archived from the original on 2007-03-05.
  62. ↑ Open Source Versus Commercial Software: Why Proprietary Software is Here to Stay. Sams Publishing. October 2005. Retrieved 2022-05-02.
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