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Software becoming proprietaryUntil 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.[4][5] 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.[6]
[edit] Legal basisFurther information: Software law, Software copyright, Software patent, and End-user license agreement
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.[7]
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.[citation needed]
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.[8] For example, the algorithm for creating, or encoding, MP3s is patented; LAME is an MP3 encoder which is open source but illegal to use without obtaining a license for the algorithm it contains.
Proprietary software vendors usually regard source code as a trade secret.[9]
Free software licences and open-source licences use the same legal basis as proprietary software.[10] Free software companies and projects are also joining into patent pools like the Patent Commons and the Open Invention Network.
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