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Proprietary software is any computer software with restrictions on use or private modification, or with restrictions judged to be excessive on copying or publishing of modified or unmodified versions. The term proprietary software is thus the opposite of free software, generally speaking. These restrictions are placed on it by one of its proprietors. Similar terms include "closed-source software" and "non-free software".
These restrictions are enforced by either legal or technical means, or both. The most common form of technical restriction is by releasing programs that are only computer-readable (for example, in binary format), and withholding the human-readable source code. Legal means of enforcement include copyright (possibly with a restrictive software license) and patents. The source code of such programs is usually regarded as a trade secret by the owner. Access to source code by third parties commonly requires the party to sign a non-disclosure agreement. Use of software is enforced by contract law through either an explicit software license agreement or by shrink wrap licensing or click-wrap.
Relation to commercialisation
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. The difference is that whether or not 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.
Literal and legal meanings
The literal legal meaning of "proprietary" in relation to software is that it has an owner who can exercise control over what users can do with the software.
Exclusive legal rights to software by a proprietor are not required for software to be proprietary. Software which is not proprietary, like public domain software and software under a permissive license, can become proprietary software by distributing compiled, binary versions of the program without making the source code available.
The free software movement's founder Richard Stallman sometimes uses the term "user-subjugating software"  to describe proprietary software, while Eben Moglen sometimes talks of "unfree software". The term "non-free" is often used by Debian developers to describe any software whose license does not comply with Debian Free Software Guidelines, and they use "proprietary software" specifically for non-free software that provides no source code. The Open Source Initiative uses the term "proprietary software" and "closed source software".
Free software licences use the same laws used by proprietary software, but to preserve the rights to use, copy and modify the software. This technique is used with copyleft, but with other software as well. Free software companies and projects are also joining into patent pools like the Patent Commons and the Open Invention Network. See software patents and free software.
Proponents of commercial proprietary software argue that requiring users to pay for software as a product increases funding for the research and development of software. For example, Microsoft says that per-copy fees maximise the profitability of software development.
Proprietary software is said to create greater commercial activity over free software, especially in regard to market revenues.
A dependency on the future versions and upgrades for a proprietary software package can create "vendor lock-in", entrenching a monopoly position. 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. When no other vendor can provide support for the software, the ending of support for older or existing versions of a software package may be done to force users to upgrade and pay for newer versions; or migrate to either competing systems with longer support life cycles or to FOSS-based systems.
Semi-free software 
Semi-free software, as defined by the Free Software Foundation, is software that is not free software, but comes with permission for individuals to use, copy, distribute, and modify (including distribution of modified versions) only for non-profit purposes. Such software is also rejected by the Open Source Initiative and Debian.
PGP and Angband are examples of semi-free programs. The Free Software Foundation classifies semi-free software as non-free software, but draws a distinction between semi-free software and proprietary software.
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.
Well known examples of proprietary software include Microsoft Windows, RealPlayer, MATLAB, iTunes, Adobe Photoshop, Adobe Flash Google Earth, Mac OS X, Skype, Mathematica, WinZip and some versions of Unix.
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.
The end-user license agreement (EULA) for software can restrict user rights even further than traditional copyright. For example, the EULA for Microsoft Windows states that the the software "is licensed, not sold". Restrictions to the software's use include installing to one computer for a basic license, and limits the number of connections with "computers or other electronic devices". With the release of Windows Server 2003, Microsoft wanted to require companies to purchase client access licenses for each machine that connects to a server running the software. Previously the client licenses were only required for connecting systems running older versions of Windows.
Some proprietary software comes with source code or provides offers to the source code. Users are free to use and even study and modify the software in these cases, but are restricted by either licenses or non-disclosure agreements from redistributing modifications or sharing the software. Examples include Pine, the Microsoft Shared source license program, and certain proprietary implementations of Secure Shell. Microsoft's Reference Source License (Ms-RSL) and Limited Public License (Ms-LPL) are examples of a license where the source code is made available but it remains proprietary software.
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.
Proprietary software that is no cost is called freeware. Shareware, like freeware, is proprietary software available at zero price, but differs in being gratis only for a trial period, after which some restriction is imposed or it is completely disabled. Proprietary software which is no longer marketed by its owner and is used without permission by users is called abandonware and may include source code. Some abandonware has the source code released to the public domain either by its author or copyright holder and is therefore free software, and no longer proprietary software.
For certain proprietary software where the user can access source code, such as online applications (for example, Internet forum software) or Java applications (where the source can be obtained by decompiling), some developers will obfuscate the source code in order to make it difficult for users to obtain the original code. According to Jonathan Zittrain, the emergence of "closed devices" and online applications, like the iPhone, Facebook and Google apps, have made the Internet to become far more proprietary than early versions of Microsoft software.
- Business software
- Commercial software
- Commercial off-the-shelf
- Comparison of free software/open source vs. closed source
- Free software/Open source software
- List of proprietary software for Linux
- Proprietary hardware
- Proprietary protocol
- Retail software
- Software copyright
- Vijay Luthra (2009-06-04). "proprietary software". BusinessDictionary.com. Retrieved 2009-06-04.
- Rosen, Lawrence (2004). Open Source Licensing. Upper Saddle River: Prentice Hall. p. 52. ISBN 978-0131487871.
- Havoc Pennington (2008-03-02). "Debian Tutorial". 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.
- David A. Wheeler (2009-02-03). "Free-Libre / Open Source Software (FLOSS) is Commercial Software". Retrieved 2009-06-03.
- Rosen, Lawrence (2004). Open Source Licensing. Upper Saddle River: Prentice Hall. p. 255. ISBN 978-0131487871.
- Heffan, Ira V. (1997), "Copyleft: Licensing Collaborative Works in the Digital Age", Standford Law Review 49: 1490,
Under the proprietary software model, most software developers withhold their source code from users.
- Margolis, Philip E. (1999). Webster's Computer & Internet Dictionary. Random House. p. 452.
[P]roprietary is the opposite of open. A proprietary design or technique is one that is owned by a company. It also implies that the company has not divulged specifications that would allow other companies to duplicate the product.
- Daniel A. Tysver (2008-11-23). "Why Protect Software Through Patents". Bitlaw.com. Retrieved 2009-06-03.
In connection with software, an issued patent may prevent others from utilizing a certain algorithm (such as the GIF image compression algorithm) without permission, or may prevent others from creating software programs that perform a function in a certain way. In connection with computer software, copyright law can be used to prevent the total duplication of a software program, as well as the copying of a portion of software code.
- Donovan, S. (1994), "Patent, copyright and trade secret protection for software", Potentials, IEEE 13 (3): 20,
Essentially there are only three ways to protect computer software under the law: patent it, register a copyright for it, or keep it as a trade secret.
- Cynthia Keeshan (2009-04-30). "The Software Ecosystem". Microsoft Corporation, Canada. Retrieved 2009-04-30.
Commercial software companies develop and distribute proprietary software to generate revenue. (original emphasis)
- Vinod Valloppillil, Microsoft Corporation (2006-10-12). "Halloween Document 1". Microsoft Halloween documents leak. Eric S. Raymond. Retrieved 2009-04-30.
Commercial software is classic Microsoft bread-and-butter. It must be purchased, may NOT be redistributed, and is typically only available as binaries to end users. (original emphasis)
- Russell McOrmond (2000-01-04). "What is "Commercial Software"?". Retrieved 2009-05-02.
- 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.
- 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 software to be commercial [...] without being proprietary. The reverse is also possible, for example in binary-only freeware.
- Free Software Foundation (2008-12-31). "Selling Free Software". Retrieved 2009-06-03.
- Rosenberg, Donald (2000). Open Source: The Unauthorized White Papers. Foster City: IDG. p. 109. ISBN 0-7645-4660-0.
- "Categories of Free and Non-Free Software - Free Software Foundation".
- Stallman, Richard (February 17, 2009). "Re: GCC and the Visual Basic programmer....". firstname.lastname@example.org mailing list. http://gcc.gnu.org/ml/gcc/2009-02/msg00275.html. Retrieved September 24, 2009.
- Russell Nelson (2008-03-14). "Who speaks for the Open Source Community?". Retrieved 2008-06-11.
When we, the open source community, want to make an agreement with the proprietary software vendors, who do we talk to?
- Russell Nelson (2008-03-24). "Patent owners and Open Source". Retrieved 2009-06-11.
The purpose of closed-source software is to give you ownership over the code.
- Eben Moglen (2005-02-12). "Why the FSF gets copyright assignments from contributors". Retrieved 2009-06-26.
Under US copyright law, which is the law under which most free software programs have historically been first published, [...] only the copyright holder or someone having assignment of the copyright can enforce the license.
- "The Commercial Software Model". Microsoft. May 2001. Retrieved 2007-03-05.
- "Open Source Versus Commercial Software: Why Proprietary Software is Here to Stay". Sams Publishing. October 2005. Retrieved 2007-03-05.
- The Linux Information Project (2006-04-29). "Vendor Lock-in Definition". Retrieved 2009-06-11.
Vendor lock-in, or just lock-in, is the situation in which customers are dependent on a single manufacturer or supplier for some product [...] This dependency is typically a result of standards that are controlled by the vendor [...] It can grant the vendor some extent of monopoly power [...] The best way for an organization to avoid becoming a victim of vendor lock-in is to use products that conform to free, industry-wide standards. Free standards are those that can be used by anyone and are not controlled by a single company. In the case of computers, this can usually be accomplished by using free software rather than proprietary software (i.e., commercial software).
- "What happens when a proprietary software company dies?". NewsForge. October 2003. Retrieved 2007-03-05.
- "Microsoft Turns Up The Heat On Windows 2000 Users". InformationWeek. December 2006. Retrieved 2008-09-16.
- Semi-free software, definition by the Free Software Foundation
- Free Software Foundation (2009-05-05). "Frequently Asked Questions about the GNU Licenses". Retrieved 2009-06-25.
- Richard Stallman (2004-04-12). "Free But Shackled - The Java Trap". Retrieved 2009-06-25.
- Engelfriet, Arnoud (August/September 2006). "The best of both worlds". Intellectual Asset Management (IAM) (New Hibernia House, Winchester Walk, London Bridge, London SE1 9AG, United Kingdom: Gavin Stewart) (19). Retrieved 2008-05-19. Check date values in:
- Loftus, Jack (2007-02-19). "LinuxWorld: Managing mixed source software stacks". SearchEnterpriseLinux.com.
- Tan, Aaron (2006-12-28). "Novell: We're a 'mixed-source' company". CNET Networks, Inc.
- Microsoft Corporation (2005-04-01). "End-User License Agreement for Microsoft Software: Microsoft Windows XP Professional Edition Service Pack 2" (PDF). p. Page 3. Retrieved 2009-04-29.
Microsoft reserves all rights not expressly granted to you in this EULA. The Software is protected by copyright and other intellectual property laws and treaties. Microsoft or its suppliers own the title, copyright, and other intellectual property rights in the Software. The Software is licensed, not sold. (original emphasis)
- Microsoft Corporation (2005-04-01). "End-User License Agreement for Microsoft Software: Microsoft Windows XP Professional Edition Service Pack 2" (PDF). p. Page 1. Retrieved 2009-04-29.
You may install, use, access, display and run one copy of the Software on a single computer, such as a workstation, terminal or other device (“Workstation Computer”). The Software may not be used by more than two (2) processors at any one time on any single Workstation Computer.
- Microsoft Corporation (2005-04-01). "End-User License Agreement for Microsoft Software: Microsoft Windows XP Professional Edition Service Pack 2" (PDF). p. Page 1. Retrieved 2009-04-29.
You may permit a maximum of ten (10) computers or other electronic devices (each a 'Device') to connect to the Workstation Computer to utilize one or more of the following services of the Software: File Services, Print Services, Internet Information Services, Internet Connection Sharing and telephony services.
- Daniel Thomas (2002-12-05), "Microsoft changes licensing again", Computer Weekly,
Under the previous licensing model, Microsoft only required companies to purchase a client access licence when their users accessed server software, such as Windows NT 4, with an earlier version of Windows desktop software. So, users accessing Windows 2000 Server with Windows 2000 Professional would not need a client access licence. The new model, which will come into effect in April to coincide with the launch of Windows .net Server 2003, will require companies to purchase Terminal Server client access licences for all Windows desktop users accessing the latest version of Microsoft's server software.
- Brian Braiker (2008-05-02). "A Killer Product: Will closed devices like Apple's iPhone murder the Web?". Retrieved 2009-06-16.
Through historical accident, we've ended up with a global network that pretty much allows anybody to communicate with anyone else at any time. Devices could be reprogrammed by them at any time, including code written by other people, so you don't have to be a nerd to get the benefits of reprogramming it. [But] this is an historical accident. Now, I see a movement away from that framework--even though it doesn't feel like a movement away. [For example,] an iPhone can only be changed by Steve Jobs or soon, with the software development kit, by programmers that he personally approves that go through his iPhone apps store. Or whimsical applications that run on the Facebook platform or the new Google apps. These are controllable by their vendors in ways that Bill Gates never dreamed of controlling Windows applications. [...] That's the ironic thing. Bill Gates is Mr. Proprietary. But for my purposes, even under the standard Windows operating system from 1990, 1991, you write the code, you can hand it to somebody else and they can run it. Bill Gates has nothing to say about it. So it's funny to think that by moving in Steve Jobs's direction it actually ends up far more proprietary.
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