Cometh the hour
The BSDs owe their existence to Bill Joy, the former luminary of Sun Microsystems, who wrote vi, NFS and the C Shell while he was a graduate student at Berkeley in the seventies. He was also the main contributor to BSD Unix, the Unix that was better than Unix (which for much of its history was funded by DARPA, which also funded MIT's AI Lab, out of which the free software movement later evolved), and wrote the BSD TCP/IP stack which became a staple of many operating systems, including some versions of Windows.
As John Gage, his fellow Berkeley student and later Sun employee, told it, "BBN had a big contract to implement TCP/IP, but their stuff didn't work, and Joy's grad student stuff worked. So they had this big meeting and this grad student in a T-shirt shows up, and they said, 'How did you do this?' And Bill said, 'It's very simple - you read the protocol and write the code.'"
Joy's contribution to BSD, and the evolution of BSD itself have been heavily mythologised, but Berkeley led the way for much of what came later, and BSD became the underpinning for several proprietary flavours of Unix, including SunOS, DEC Ultrix, and NextStep, which later metamorphosed through several incarnations into Apple's OS X. The first port of a free version of BSD to an Apple computer, MacBSD, was released in 1993, and later merged with NetBSD.
In 1985, Bill Joy said that "Just about every computer on the market today runs Unix, except the Mac (and nobody cares about it)." These days the opposite would probably be closer to the truth.
Despite the widespread myth that the core of OS X is FreeBSD, OS X does not use the FreeBSD kernel, but takes elements of FreeBSD such as the network stack, VFS, and subsystems for file handling and inter-process communications, and sits them on top of a Mach kernel.
Apple has employed members of the FreeBSD community, notably Jordan Hubbard, one of the founders of the project, who is now "Director of Engineering of Unix Technologies" at Apple, and notwithstanding some misunderstandings, Apple has donated code back to FreeBSD via Darwin and/or the APSL (Apple Public Source License).
Light and darkness
But for the early matter of the legal dispute over the ownership of the rights to the BSD code between USL and BSDi the path of FreeBSD and open source Unix has been a tale of steady progress from release to evolutionary release, bolstered by the support of Apple, considerable success with web hosting companies and the manufacturers of networking devices, and the technical support for TrustedBSD from government agencies such as DARPA and the NSA.
The court case has been likened to SCO's dispute with Linux users, and was ultimately significant in that it clarifed the right of the BSDs to build on the work of BSDi. AT&T's Unix System Laboratories (USL) had sued BSDi and the Regents of the University of California in 1992 for distributing USL's 'Intellectual Property' in the form of the 4.3BSD-Lite (Net-2) release. 4.3BSD-Lite was at the heart of FreeBSD's first two releases.
The case was settled out of court in early 1994, with the removal of three files from the 18,000 that were included in 4.3BSD-Lite. As part of the agreement Berkeley released 4.4BSD-Lite, which was incomplete, and the FreeBSD project was forced to re-engineer its base operating system, resulting in the FreeBSD 2.0 release of early 1995.
The terms of the settlement were secret but a copy, dated 2/4/1994 , was unearthed by a Groklaw contributor in 2004. The case ended in triumph, in so much as the judge expressed doubt about the validity of USL's 'IP' and the code that constituted 4.3BSD-Lite was put in the clear, but was undoubtedly a setback, which some have claimed, slowed the uptake of BSD and opened the way for the prodigious growth of Linux.