Proprietary software is computer software licensed^{[citation needed]} under exclusive legal right of the copyright holder.^{[citation needed]} The licensee is given the right to use the software under certain conditions, while restricted from other uses, such as modification, further distribution, or reverse engineering.^{[citation needed]}

Complementary terms include free software,^{[citation needed]} 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.

In the software industry, commercial software refers to software produced for sale, which is a related but distinct categorization.

According to Eric S. Raymond, in the Jargon File, "In the language of hackers and users" it is used pejoratively, with the meaning of "inferior" and "a product not conforming to open-systems standards".

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. 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.