BSD originally stood for "Berkeley Source Distribution". The BSD License is the license agreement that the BSD software (largely, a version of UNIX) is distributed under. The owner of the original BSD distribution was the "Regents of the University of California". This is because BSD originally came from the University of California, Berkeley.

Versions of the current BSD template (and the older version with the advertising clause) are often used by other organizations. The BSD License does not prohibit the use of the material licensed in products for resale. A notable example of this is the use of BSD networking code in Microsoft products, or the use of numerous FreeBSD components in MacOS X.

It is possible for something to be distributed with the BSD License and some other license to apply as well. This was in fact the case with very early versions of BSD Unix itself, which included proprietary material from AT&T.

As originally distributed the license had an extra clause, the so called advertising clause:

     * 3. All advertising materials mentioning features or use of this software
     *    must display the following acknowledgement:
     *    This product includes software developed by the University of
     *    California, Berkeley and its contributors.

The GNU project referred to it as the "obnoxious BSD advertising clause". Along with offending people, the clause caused a practical problem. People who made changes to the source code tended to want to have their names added to the acknowledgement. With large numbers of people working on a single project (or for many separate projects in a software distribution), the advertising clause quickly created large and unwieldy acknowledgements. Another practical problem was legal incompatibility with the terms of the GNU General Public License (which does not allow the addition of restrictions beyond those it already imposes), forcing a segregation of GNU and BSD software. The GNU project went so far as to suggest people not use the phrase "BSD-style" licensing when they wanted to refer to an example of a non-copyleft license, in order to prevent inadvertent usage of the original BSD license.

On July 22, 1999, William Hoskins, the director of the office of technology licensing for Berkeley, revoked the clause. The document enacting that revocation is available at <>. The original license is now sometimes called "BSD-old" or "4-clause BSD", with the revised license sometimes called "BSD-new", "revised BSD", or "3-clause BSD".

A 2-clause BSD-like license also exists; the clause deletes the third section, which prohibits use of the name of the copyright holder for endorsement purposes.

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