User:Pnm/Sandbox/Proprietary software

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Proprietary software is computer software sold or licensed under exclusive legal right of its owner. The customer, or licensee, is given the right to use the software under certain circumstances, but restricted from other uses, such as modification, further distribution, or reverse engineering.

Complementary terms include public domain software, which is not subject to copyright and can be used for any purpose, and free software, licensed by the owner under more permissive terms. Many proponents of free and open source software including Richard Stallman use proprietary or non-free to describe software that doesn't meet their criteria for free or open source, though specific definitions vary.

Examples of proprietary software include Microsoft Windows, Adobe Flash Player, Mac OS X, Adobe Photoshop, iTunes, Safari, Google Earth, WinZip, the Playstation 3 operating system, and some versions of Unix.

Legal basis[edit]

Most software is covered by copyright, which provides legal basis for its owner to establish exclusive rights. Applicable Contract law, patent, and trade secrets may also apply.

A software vendor delineates the specific terms of use in an end-user license agreement (EULA). The user may agree to this contract interactively, called clickwrap licensing, by opening the box containing the software, called shrink wrap licensing, or in writing. License agreements are usually not negotiable.

Software patents grant exclusive rights to algorithms, software features, or other patentable subject matter. Laws on software patents vary by jurisdiction and are a matter of ongoing debate. Vendors sometimes grant patent rights to the user in the license agreement.[1] For example, the algorithm for creating, or encoding, MP3s is patented. LAME is an encoder which is open source but illegal to use without obtaining a license to use the algorithm it contains.

Proprietary software vendors usually regard source code as a trade secret.[2]

In addition to establishing exclusive rights, many software vendors include an indemnification provision in license agrements to limit their liability.

License agreements can't supercede applicable copyright law or contract law, so provisions that conflict may not be enforceable.

Some vendors argue that software licensing is not a sale, and that limitations of copyright like the first-sale doctrine do not apply. The EULA for Microsoft Windows, for example, states that the software is licensed, not sold.[3]

Exclusive rights[edit]

The owner of proprietary software exercises certain exclusive rights over the software. Commonly, the owner restricts use, inspection of source code, modification of source code, and redistribution.

Use of the software[edit]

Vendors typically limit the number of computers on which software can be used, and prohibit the user from installing the software on additional 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 three devices in one household.
  • Windows XP can be installed on one computer, and limits the number of network file sharing connections to 10.[4] The Home Edition disables features present in Windows XP Professional.
  • Many Adobe licenses are limited to one user, but allow the user to install a second copy on a home computer or laptop.[5]
  • 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[edit]

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, written in a higher level programming language.[6] This scheme is often referred to as closed source.[7]

By withholding source code, the software producer prevents the user from understanding how the software works and from changing how it works.[8] This practice is denounced by some critics, who argue that users should be able to study and change the software they use, for example, to remove secret or malicious features, or look for security vulnerabilities. Richard Stallman says that proprietary software commonly contains "malicious features, such as spying on the users, restricting the users, back doors, and imposed upgrades."[9] Some proprietary software vendors say that retaining the source code makes their software more secure, because the widely available code for open-source software makes it easier to identify security vulnerabilities[10]. Open source proponents say that wide availability results in increased scrutiny of the source code, making open source software more secure.[11]

While most proprietary software is closed-source, some vendors distribute the source code or otherwise make it available to customers. The source code is covered by a non-disclosure agreement or a license that allows certain use, 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 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.[12][13] 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.

Software vendors sometimes use obfuscated code to impede users who would reverse engineer the software. This is particularly common with certain programming languages. The bytecode for programs written in Java can be easily decompiled to somewhat usable code,[citation needed]) and programs written in scripting languages such as PHP or JavaScript require the source code at run time.[14]


Proprietary software vendors usually prohibit users from sharing the software with others. A separate license is required for another party to use the software.

In the case of open-source proprietary software, the vendor may also prohibit customers from distributing their modifications to the source code.

Shareware is closed-source software whose owner encourages redistribution, but for which the user must pay 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 other software[edit]

Proprietary file formats and protocols[edit]

Proprietary software often stores its data using proprietary file formats and communicates using proprietary protocols, which are controlled by the vendor. Most proprietary formats and protocols are secret and incompatible with other software. Their use may be restricted by trade secret or patent rights.

Proprietary APIs[edit]

Software libraries, software development kits, and operating systems may expose functionality to independent developers through proprietary application programming interfaces (APIs).[15] The motivation for using a proprietary API can be vendor lock-in or because standard APIs do not support the device's functionality.[15]

The European Commission, in its March 24, 2004 decision on Microsoft's business practices,[16] 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 meant to protect Apple's innovations.[17] The agreement forbade independent developers from discussing the content of the interfaces.

Vendor lock-in[edit]

Proprietary standards controlled by the vendor sometimes force dependence on that vendor in the future, creating vendor lock-in, a kind of monopolistic power.[18]


Most proprietary software is commercial, meaning it's sold for a fee. Proprietary software vendors say requiring users to pay for software increases funding for software research and development. Proprietary software is said to create greater commercial activity over free software, especially in regard to market revenues.[19] Microsoft says that per-copy fees maximize the profitability of software development.[20]

Some vendors say the business relationship with their customers creates accountability.[21]

Proprietary software distributed at no cost is called freeware.

Software end-of-life[edit]

Eventually, software vendors will discontinue a particular product, or a particular version of the product. Vendors sometimes end support for older versions of software to force users to pay for newer versions.[22]

Discontinued software is sometimes called abandonware, particularly when it's used without permission. Sometimes vendors release discontinued and commercially obsolete software with an open source or public domain license.

In 2003 accounting software provider Appgen abruptly disappeared, and resellers were unable to provide support because of uncertain legal status of the source code.[23]

The alternatives: non-proprietary software[edit]

Free software and open-source software[edit]

Richard Stallman is a fierce opponent of proprietary software. In 1983 he conceived the free software movement to replace it with free software, which can be used, studied, modified, and redistributed with or without changes. Stallman sometimes describes proprietary software as user-subjugating software[24].

In 1998 the open source movement branched off, seeking to collaborate with established software companies, and taking a more pragmatic and less ethics-oriented approach. This coincided with the open sourcing of the Netscape Communicator from which today's Mozilla Firefox was derived.

Free and open source software have the same legal basis as proprietary software.[25]

Some software vendors distribute free software for a fee.[26][27][28] 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.[29]

Related usage[edit]

Developers of the Linux distribution Debian describe software not meeting the Debian Free Software Guidelines as non-free. If no source code is provided, the software is also considered proprietary.

In the past, the Free Software Foundation described software as semi-free, between free and proprietary, if it came with permission to use, copy, distribute and modify either for non-profit purposes only, or with the prohibition to redistribute modified copies or derived works. Examples include encryption software PGP and the video game Angband. It has now dropped this distinction and considers the software non-free,[30] as do the Debian Free Software Guidelines and the Open Source Definition.

The Free Software Foundation describes free software that depends on proprietary software as trapped, such as software that runs only on Microsoft Windows.[31] (Previously, software requiring Java was in this category.[32])

Free software advocate Eben Moglen sometimes talks of unfree software.

Public domain software[edit]

When copyright holders (and any other rights holders) forfeit their exclusive rights to intellectual property in a piece of software, they are placing it in the public domain. Software over which exclusive rights have expired or that is not copyrightable would also be public domain. Such software can be used for any purpose – even incorporation into proprietary, closed-source software.[33][34]

Combining proprietary and non-proprietary software[edit]

Proprietary software can incorporate free software that is permissively licensed or public domain.[33][34] To prohibit such incorporation, free software developers often require that derivative software is distributed under the same terms. Such a license is called a copyleft license or viral license, in contrast to a non-copyleft permissive free software license.

Software distributions considered as proprietary may in fact incorporate a "mixed source" model including both free and non-free software in the same distribution.[35] 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.[36][37]


IBM's early mainframes sold in the 1960s came with service and software included, generally in source code form. In 1969, IBM led an industry change in software marketing by charging separately for software and services. IBM stopped distributing source code at this time.

According to Jonathan Zittrain, "closed devices" like the iPhone and online applications like Facebook and Google Apps made the Internet far more proprietary than early versions of Microsoft Windows.[38]

See also[edit]

Some vendors of proprietary software release another version that is free and open source. Examples include MySQL, Sendmail, and some versions of Secure Shell.[clarification needed]


  1. ^ Daniel A. Tysver (2008-11-23). "Why Protect Software Through Patents". 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. 
  2. ^ 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. 
  3. ^ 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) 
  4. ^ 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. ... 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. 
  5. ^ Adobe Systems, Adobe Software License Agreement (PDF), retrieved 2010-06-09 
  6. ^ Heffan, Ira V. (1997), "Copyleft: Licensing Collaborative Works in the Digital Age" (PDF), Stanford Law Review, 49: 1490, Under the proprietary software model, most software developers withhold their source code from users. 
  7. ^ David A. Wheeler (2009-02-03). "Free-Libre / Open Source Software (FLOSS) is Commercial Software". Retrieved 2009-06-03. 
  8. ^ 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. 
  9. ^ Stallman, Richard (2009). "Viewpoint: Why "open source" misses the point of free software". Communications of the ACM. ACM. 52 (6): 31–33. doi:10.1145/1516046.1516058. Retrieved 2010-03-08.  Unknown parameter |month= ignored (help)
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  11. ^
  12. ^
  13. ^
  14. ^ Tony Patton (2008-11-21). "Protect your JavaScript with obfuscation". Retrieved 2009-06-12. While the Web promotes the sharing of such code, there are times when you or a client may not want to share their JavaScript code. This may be due to the sensitive nature of data within the code, proprietary calculations, or any other scenario. 
  15. ^ a b
  16. ^ "Commission Decision of 24.03.2004 relating to a proceeding under Article 82 of the EC Treaty (Case COMP/C-3/37.792 Microsoft)" (PDF). European Commission. March 24, 2004. Retrieved June 17, 2009. 
  17. ^
  18. ^ 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). 
  19. ^ "Open Source Versus Commercial Software: Why Proprietary Software is Here to Stay". Sams Publishing. 2005. Retrieved 2007-03-05.  Unknown parameter |month= ignored (help)
  20. ^ "The Commercial Software Model". Microsoft. 2001. Retrieved 2007-03-05.  Unknown parameter |month= ignored (help)
  21. ^
  22. ^ "Microsoft Turns Up The Heat On Windows 2000 Users". InformationWeek. 2006. Retrieved 2008-09-16.  Unknown parameter |month= ignored (help)
  23. ^ "What happens when a proprietary software company dies?". NewsForge. 2003. Retrieved 2007-03-05.  Unknown parameter |month= ignored (help)
  24. ^ Stallman, Richard (February 17, 2009). "Re: GCC and the Visual Basic programmer..." (Mailing list). Retrieved September 24, 2009. 
  25. ^ 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. 
  26. ^ Rosen, Lawrence (2004). Open Source Licensing. Upper Saddle River: Prentice Hall. pp. 52, 255, 259. ISBN 978-0131487871. 
  27. ^ 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. 
  28. ^ 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. 
  29. ^ Free Software Foundation (2008-12-31). "Selling Free Software". Retrieved 2009-06-03. 
  30. ^ Semi-free software, definition by the Free Software Foundation
  31. ^ Free Software Foundation (2009-05-05). "Frequently Asked Questions about the GNU Licenses". Retrieved 2009-06-25. 
  32. ^ Richard Stallman (2004-04-12). "Free But Shackled - The Java Trap". Retrieved 2009-06-25. 
  33. ^ a b Rosenberg, Donald (2000). Open Source: The Unauthorized White Papers. Foster City: IDG. p. 109. ISBN 0-7645-4660-0. 
  34. ^ a b "Categories of Free and Non-Free Software - Free Software Foundation". 
  35. ^ 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: |date= (help)
  36. ^ Loftus, Jack (2007-02-19). "LinuxWorld: Managing mixed source software stacks". 
  37. ^ Tan, Aaron (2006-12-28). "Novell: We're a 'mixed-source' company". CNET Networks, Inc. 
  38. ^ 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.