It's worth mentioning that rc4 was not patented, but kept closed as a trade secret.
RSADSI claimed it to be very strong, and when the source was anonymously published to
USENET in 1994, people with licensed rc4 implementations confirmed compatibility, the cat was out of the bag.
This makes the legal situation regarding the algorithm foggy, but RSADSI's claims were substantiated, it is very secure.
Also, it is a
stream cipher, which means it produces ciphertext by XOR'ing the plaintext bit by a
keystream bit, one bit at a time. This is opposed to a
block cipher, like
AES,
rc{5,6}, or
DES, which operate on set size chunks of plaintext.
The name
ARCFOUR has been proposed for the algorithm which is compatible with rc4.