a reply to:
Vasa Croe
Are you asking 'what' it is, or are you asking 'why' it is? Both questions are actually quite complicated to answer fully without going into a whole
myriad of subjects relating to the concept of "intellectual property" in the legal sense.
I'll leave the technical elements of 'what' it is to others, but I am pretty familiar with 'why' it is and can respond to that in a fair amount of
detail.
Briefly, the basic difference is, if someone legally has the rights to the source code they technically own it. As owners they can do what they
please with it, including modifying it, or even selling it to someone else. Escrow is different. Escrow is a holding place for the software source
code, by a disinterested 3rd party, where neither party has complete title to it. The purpose of an escrow arrangement is to ensure that the
purchaser of a software developed specifically for them will have access to it, but only if certain circumstances are met. These circumstances
usually involve things like failure to perform, or respond, on behalf of the original developer. An example is probably appropriate here.
Example #1 (source code) - If I pay you to develop for me some piece of software, or process, and I stipulate as part of that agreement that when you
successfully complete the development you will turn over all the rights to said source code to me, then I am the owner of that software or process at
that point in time. A very simplistic analogy would be, let's say you are an employee to me and your job is to write software code; anything you
develop while on my payroll is my property and you have no title to it (intellectually or otherwise). This would be part of your employment
agreement. Or, another example would be, let's say you own a small software company and I award you a contract to develop software for me, but what I
ask you to develop requires way more resources than you can afford, then I will agree to fund your resources to develop the software in return for you
giving me title to it when you're done. Basically, I fund your development costs. These are just a couple very simplistic examples.
Example #2 (Escrow) - If I pay you to develop for me some piece of software, or to customize a piece of your existing software specifically for me,
and I stipulate that you must support this software for 'x' period of time (usually a very long period of time), but you are unwilling to give me the
source code...because you may want to sell the original software to someone else tomorrow...then we enter into an escrow agreement. That agreement
will allow me access to the source code if you fail to support it in some fashion. So, for example, let's say things are bumping along smoothly until
one day we discover a bug or some sort of failure in the software which requires fixing. Again, a very simplistic example, but let's say we call you
up, but you don't return the call (maybe you've gone out of business, or simply don't like us, or whatever); once we have made every reasonable
attempt to notify you without any response or action, then we can take possession of said software and pay a 3rd party to fix it (or do it ourselves).
Conversely, escrow also does something else; it prevents you from selling what we paid you to develop to someone else. This is a little harder to
wrap your head around. You can sell the base software to anyone, and (in theory) you can sell the part we paid you to develop also (though there are
rules here), BUT you cannot change the terms of our original agreement with you in that sale. So, for example, you couldn't sell what you developed
for us to one of our competitors who might decide to use that sale as a way to extort money from us, or put us at an unfair competitive disadvantage
(there are thousands of examples here).
The subject of Intellectual Property and ownership is a very complex legal area, and people get paid a whole lot of money to understand it, keep it
sorted out, and litigate violations of these agreements. It doesn't take a whole lot of imagination to see how complicated this can get if you
consider a company like Micro-shaft, who sells an application which runs on their OS, but might make 1,000 changes...per day...to that application for
one reason or another. Some of these reasons might be a result of one of our requests, or they might be a result of someone else's request, but now
who owns the software? Now, most would answer...obviously Micro-shaft owns the software, and for most of us this might be true, but it's not always.
Companies and governments pay companies like Micro-shaft to develop very specific things only for them, and nobody else is allowed to use those
features (back door entry points into software is one good example here).
Anyway, that's a 'sort of' brief summary.
edit on 5/6/2021 by Flyingclaydisk because: (no reason given)