Software, and its accompanying source code, typically falls within one of two licensing paradigms: free software and proprietary software.

Generally speaking, software is free if the source code is free to use, distribute, modify and study, and proprietary if the source code is kept secret, or is privately owned and restricted. Note that "free" refers to freedom, not price. Under many licenses it is acceptable to charge for "free software". The first free software license to be published and to explicitly grant these freedoms was the GNU General Public License in 1989. The GNU GPL was originally intended to be used with the GNU operating system. The GNU GPL was later adopted by other non-GNU software projects such as the Linux kernel.

For proprietary software, the provisions of the various copyright laws, trade secrecy and patents are used to keep the source code closed. Additionally, many pieces of retail software come with an end-user license agreement (EULA) which typically prohibits decompilation, reverse engineering, analysis, modification, or circumventing of copy protection. Types of source code protection — beyond traditional compilation toobject code — include code encryption, code obfuscation or code morphing.