Back in the days of the first personal computer, the Altair 8800, manufactured by MITS (Micro Instrumentation Telemetry Systems), there was only one extant commercial software program: Altair BASIC.
Altair BASIC was written by Bill Gates and Paul Allen, who called their company Micro-Soft. Without BASIC, programming the Altair was tedious and time-consuming. Although the Altair had not broken in to the mainstream (business use) and was relegated to hobbyists and enthusiasts, arguably BASIC was the Altair's killer app.
MITS was shipping 1000 Altairs a month but were selling only 200 copies of BASIC to go along with them. BASIC was being openly and shamelessly copied and distributed by Altair owners.
In response to the rampant unauthorized copying1 of BASIC, Bill Gates wrote the following letter denouncing the practice of illegal2 copying.
This letter was published in the MITS monthly Computer Notes and was subsequently reprinted in many other national computer publications. The letter caused great controversy and many replies were published. While a few people who wrote and sold software for a living sided with Gates, nearly everyone else vehemently disagreed.
AN OPEN LETTER TO HOBBYISTS
By William Henry Gates III
February 3, 1976
An Open Letter to Hobbyists
To me, the most critical thing in the hobby market right now is the lack of
good software courses, books and software itself. Without good software and
an owner who understands programming, a hobby computer is wasted. Will
quality software be written for the hobby market?
Almost a year ago, Paul Allen and myself, expecting the hobby market to
expand, hired Monte Davidoff and developed Altair BASIC. Though the initial
work took only two months, the three of us have spent most of the last year
documenting, improving and adding features to BASIC. Now we have 4K, 8K,
EXTENDED, ROM and DISK BASIC. The value of the computer time we have used
exceeds $40,000.
The feedback we have gotten from the hundreds of people who say they are
using BASIC has all been positive. Two surprising things are apparent,
however, 1) Most of these "users" never bought BASIC (less than 10% of all
Altair owners have bought BASIC), and 2) The amount of royalties we have
received from sales to hobbyists makes the time spent on Altair BASIC worth
less than $2 an hour.
Why is this? As the majority of hobbyists must be aware, most of you steal
your software. Hardware must be paid for, but software is something to share.
Who cares if the people who worked on it get paid?
Is this fair? One thing you don't do by stealing software is get back at MITS
for some problem you may have had. MITS doesn't make money selling software.
The royalty paid to us, the manual, the tape and the overhead make it a
break-even operation. One thing you do do is prevent good software from being
written. Who can afford to do professional work for nothing? What hobbyist
can put 3-man years into programming, finding all bugs, documenting his
product and distribute for free? The fact is, no one besides us has invested
a lot of money in hobby software. We have written 6800 BASIC, and are writing
8080 APL and 6800 APL, but there is very little incentive to make this
software available to hobbyists. Most directly, the thing you do is theft.
What about the guys who re-sell Altair BASIC, aren't they making money on
hobby software? Yes, but those who have been reported to us may lose in the
end. They are the ones who give hobbyists a bad name, and should be kicked
out of any club meeting they show up at.
I would appreciate letters from any one who wants to pay up, or has a
suggestion or comment. Just write to me at 1180 Alvarado SE, #114,
Albuquerque, New Mexico, 87108. Nothing would please me more than being able
to hire ten programmers and deluge the hobby market with good software.
Bill Gates
General Partner, Micro-Soft
1"Publishers often refer to prohibited copying as 'piracy.' In this way, they imply that illegal copying is ethically equivalent to attacking ships on the high seas, kidnapping and murdering the people on them.
If you don't believe that illegal copying is just like kidnapping and murder, you might prefer not to use the word 'piracy' to describe it. Neutral terms such as 'prohibited copying' or 'unauthorized copying' are available for use instead. Some of us might even prefer to use a positive term such as 'sharing information with your neighbor.'"
--RMS in GNU's Some Confusing or Loaded Words and Phrases that are Worth Avoiding (http://www.gnu.org/philosophy/words-to-avoid.html)
2I cannot find a reference to what extent there was legal precedent at this point that declared unauthorized copying to be illegal at this point in history. I would appreciate any pointers in this respect. I suspect that, according to the laws on the books, it was technically illegal, but the practice was not prosecuted.