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Proprietary software

Proprietary software or closed source software is computer software licensed under exclusive legal right of the copyright holder with the intent that the licensee is given the right to use the software only under certain conditions, and restricted from other uses, such as modification, sharing, studying, redistribution, or reverse engineering.[1][2] Usually the source code of proprietary software is not made available.

Complementary terms include free software,[2][3] licensed by the owner under more permissive terms, and public domain software, which is not subject to copyright and can be used for any purpose. Proponents of free and open source software use proprietary or non-free to describe software that is not free or open source.[4][5]

A related, but distinct categorization in the software industry is commercial software which refers to software produced for sale, but without meaning it is closed source.


  • Software becoming proprietary 1
  • Legal basis 2
    • Limitations 2.1
  • Exclusive rights 3
    • Use of the software 3.1
    • Inspection and modification of source code 3.2
    • Redistribution 3.3
  • Interoperability with software and hardware 4
    • Proprietary file formats and protocols 4.1
    • Proprietary APIs 4.2
    • Vendor lock-in 4.3
    • Software limited to certain hardware configurations 4.4
  • Abandonment by owners 5
  • Pricing and economics 6
  • Similar terms 7
  • Examples 8
    • Formerly open source 8.1
  • See also 9
  • References 10

Software becoming proprietary

Until the late 1960s computers—huge and expensive mainframe machines in specially air-conditioned computer rooms—were usually supplied on a lease rather than purchase basis.[6][7] Service and all software available were usually supplied by manufacturers without separate charge until 1969. Software source code was usually provided. Users who developed software often made it available, without charge. Customers who purchased expensive mainframe hardware did not pay separately for software.

In 1969, IBM, under threat of Antitrust litigation, led an industry change by starting to charge separately for (mainframe) software and services, and ceasing to supply source code.[8]

Legal basis

Most software is covered by copyright which, along with contract law, patents, and trade secrets, provides legal basis for its owner to establish exclusive rights.[9]

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, called clickwrap licensing, or by opening the box containing the software, called shrink wrap licensing. License agreements are usually not negotiable.[10]

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.[11]

Proprietary software vendors usually regard source code as a trade secret.[12]

Free software licenses and open-source licenses use the same legal basis as proprietary software.[13] Free software companies and projects are also joining into patent pools like the Patent Commons and the Open Invention Network.


License agreements do not override applicable copyright law or contract law. Provisions that conflict may not be enforceable.[14]

Some vendors say 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 states that the software is licensed, not sold.[15]

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 can be installed on one computer, and limits the number of network file sharing connections to 10.[16] 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.[17]
  • iWork '09, Apple's productivity suite, is available in a five-user family pack, for use on up to five computers in a household.[18]

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, written in a higher level programming language.[19] This scheme is often referred to as closed source.[20]

By withholding source code, the software producer prevents the user from understanding how the software works and from changing how it works.[21] 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, founder of the Free Software Foundation, says that proprietary software commonly contains "malicious features, such as spying on the users, restricting the users, back doors, and imposed upgrades."[22] 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.[23] Open source proponents pejoratively call this security through obscurity, and say that wide availability results in increased scrutiny of the source code, making open source software more secure.[24]

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 his or her 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 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.[25][26] 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.[27][28]

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.[29]


Proprietary software vendors can prohibit 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 stores some of its data in file formats which 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.

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."[30] The motivation for using a proprietary API can be vendor lock-in or because standard APIs do not support the device's functionality.[30]

The European Commission, in its March 24, 2004 decision on Microsoft's business practices,[31] 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.[32]

Vendor lock-in

A dependency on the future versions and upgrades for a proprietary software package can create vendor lock-in, entrenching a monopoly position.[33]

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 Mac OS X, 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.[34]

Abandonment by owners

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 have 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.

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.[35] 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.[36]

Pricing and economics

Proprietary software is not synonymous with commercial software,[37][38] though the industry commonly confuses the term,[39][40] as does the free software community.[41][42] 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.[43] 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.[44]

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 maximise the profitability of software development.[45]

Proprietary software generally creates greater commercial activity over free software, especially in regard to market revenues.[46]

Similar terms

  • The founder of free software movement, Richard Stallman, sometimes uses the term "user-subjugating software"[47] to describe proprietary software.
  • 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 terms "proprietary software" and "closed source software" interchangeably.[48][49]

A related concept is closed platform or "walled garden". The term "silo" is used to describe the even broader notion of "closed habitats that serve as private marketplaces that lock customers in and competitors out".[50][51]


Examples of proprietary software include Microsoft Windows, Adobe Flash Player, PS3 OS, iTunes, Adobe Photoshop, Google Earth, Mac OS X, Skype, WinRAR, Java 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.[52] 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.[53][54]

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.[55][56] Free software that depends on proprietary software is considered "trapped" by the Free Software Foundation. This includes software written only for Microsoft Windows,[57] or software that could only run on Java, before it became free software.[58]

In India, one and a half million laptops were pre-loaded with screen savers of political minister Mulayam Singh Yadav. The author of software developed for these laptops included a malicious feature that would "crash" the device if the laptop's owner attempted to change, remove, or modify this feature.[59]

Formerly open source

Some closed-source software was formerly open-source, but most of those kinds are usually still free-of-charge to download. A famous example of such is the Doom source port ZDaemon which was prone to aimbot cheaters.

See also


  1. ^ FAQ about Copyright - Chilling Effects Clearinghouse. Retrieved on 2013-06-16.
  2. ^ a b proprietary software is opposite of free software. (2005-07-03). Retrieved on 2013-06-16.
  3. ^ Why Open Source Software / Free Software (OSS/FS, FOSS, or FLOSS)? Look at the Numbers!. Retrieved on 2013-06-16.
  4. ^ "Categories of Free and Nonfree Software - GNU Project - Free Software Foundation (FSF)". Retrieved 2011-10-25. Proprietary software is another name for nonfree software. 
  5. ^ Vasudha Venugopal. "Free software and basic freedom".   quoting Richard M. Stallman.
  6. ^ Paul E.Ceruzzi (2003). A history of modern computing.  
  7. ^ "History of Leasing". Retrieved 2010-11-12. In the 1960s, IBM and Xerox recognized that substantial sums could be made from the financing of their equipment. The leasing of computer and office equipment that occurred then was a significant contribution to leasings growth, since many companies were exposed to equipment leasing for the first time when they leased such equipment 
  8. ^ "".  
  9. ^ Liberman, Michael (1995). "Overreaching Provisions in Software License Agreements".  
  10. ^ Limitations and Exceptions to Copyright and Neighbouring Rights in the Digital Environment: An International Library Perspective (2004). IFLA (2013-01-22). Retrieved on 2013-06-16.
  11. ^ 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. 
  12. ^ Donovan, S. (1994). "Patent, copyright and trade secret protection for software". Potentials, IEEE 13 (3): 20.  
  13. ^ 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. 
  14. ^
  15. ^  
  16. ^  
  17. ^  
  18. ^ iWork '09 Family Pack Specs (complete package) - Presentation - CNET Reviews. Retrieved on 2013-06-16.
  19. ^ Heffan, Ira V. (1997). "Copyleft: Licensing Collaborative Works in the Digital Age". Stanford Law Review 49: 1490. Under the proprietary software model, most software developers withhold their source code from users. 
  20. ^ David A. Wheeler (2009-02-03). "Free-Libre / Open Source Software (FLOSS) is Commercial Software". Retrieved 2009-06-03. 
  21. ^ Margolis, Philip E. (1999). Webster's Computer & Internet Dictionary. Random House. p. 452.  
  22. ^ Why Open Source Misses the Point of Free Software - GNU Project - Free Software Foundation. Retrieved on 2013-06-16.
  23. ^ Kingstone, Steve (2005-06-02). "Brazil adopts open-source software". BBC News. 
  24. ^ The Truth About Open Source Security | Enterprise. TechNewsWorld. Retrieved on 2013-06-16.
  25. ^ Shankland, Stephen. "Governments to see Windows code". CNET. 
  26. ^ Gao, Ken. "China to view Windows code". CNET. 
  27. ^ James Ball, Julian Borger and Glenn Greenwald (2013-09-06). "US and UK spy agencies defeat privacy and security on the internet". The Guardian. 
  28. ^ Bruce Schneier (2013-09-06). "How to remain secure against NSA surveillance". The Guardian. 
  29. ^ Tony Patton (2008-11-21). "Protect your JavaScript with obfuscation". Archived from the original on 2013-01-02. 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. 
  30. ^ a b APIs: What they are, and what they're for - Feature - Retrieved on 2013-06-16.
  31. ^ "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).  
  32. ^ Wilson, Ben (2008-10-01). "Apple Drops NDA for Released iPhone Software". CNET Reviews. Retrieved 2010-12-17. 
  33. ^ 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). 
  34. ^ Apple wins key battle against Psystar over Mac clones (2011-09-29). "Apple court victory over Pystar". Retrieved 2011-09-30. 
  35. ^ "What happens when a proprietary software company dies?". NewsForge. October 2003. Retrieved 2007-03-05. 
  36. ^ "Microsoft Turns Up The Heat On Windows 2000 Users". InformationWeek. December 2006. Retrieved 2008-09-16. 
  37. ^  
  38. ^ 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. 
  39. ^ Cynthia Keeshan (2009-04-30). "The Software Ecosystem".  
  40. ^ Vinod Valloppillil,  
  41. ^ Russell McOrmond (2000-01-04). "What is "Commercial Software"?". Retrieved 2009-05-02. 
  42. ^ 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. 
  43. ^ Eric S. Raymond (2003-12-29). , Jargon File"Proprietary". 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. 
  44. ^  
  45. ^ "The Commercial Software Model".  
  46. ^ "Open Source Versus Commercial Software: Why Proprietary Software is Here to Stay". Sams Publishing. October 2005. Retrieved 2007-03-05. 
  47. ^ . Retrieved September 24, 2009.
  48. ^ 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? 
  49. ^ 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. 
  50. ^ "Linux for Suits - The Only Silo". Linux Journal. 2006-08-26. Retrieved 2013-11-18. 
  51. ^ "Army Draws Battle Lines Against Proprietary Silos". 2013-05-29. Retrieved 2013-11-18. 
  52. ^ 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. 
  53. ^ Loftus, Jack (2007-02-19). "LinuxWorld: Managing mixed source software stacks". 
  54. ^ Tan, Aaron (2006-12-28). "Novell: We're a 'mixed-source' company". CNET Networks, Inc. 
  55. ^ Rosenberg, Donald (2000). Open Source: The Unauthorized White Papers. Foster City: IDG. p. 109.  
  56. ^ "Categories of Free and Non-Free Software - Free Software Foundation". 
  57. ^ Free Software Foundation (2009-05-05). "Frequently Asked Questions about the GNU Licenses". Retrieved 2009-06-25. 
  58. ^ Richard Stallman (2004-04-12). "Free But Shackled - The Java Trap". Retrieved 2009-06-25. 
  59. ^ Nelson, David (15 Mar 2013). "Indian laptops that crash if users try to remove pictures of minister". Telegraph. 
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