The legal concept of escrow derives from the old French word for parchment.
Deeds (usually securities or bonds) were signed, sealed and entrusted to an independent third party to hold ‘in escrow’ and deliver when certain conditions were fulfilled.
While this form of escrow still exists, the advent of the paperless age has markedly reduced its usefulness.
In the modern business world, however, increasing reliance on digital technology has prompted radical changes in business risk profiles, and the emergence of software escrow as a valuable protective measure.
For many businesses, even a short-term loss or failure of mission-critical software applications could be disastrous and its repercussions far-reaching.
Wednesday, December 21, 2005
Software escrow reduces risks of business
Essentially, software escrow is the lodging of source code (the human-readable version of software applications) by a software supplier or reseller with an agent under the terms of an escrow agreement, for the benefit of nominated licensees.
The escrow agent typically receives sealed CD-ROMs verified by the supplier to contain the source code of the licensed program(s).
These are lodged in secure storage (Ideally the Escrow agents facility) and lodgment details registered and notified to licensees.
This process is repeated each time the supplier issues an upgrade.
The program’s object code (machine-readable version) and often other information such as flow-charts and data layouts necessary for developers to understand and modify the software will also be included in the escrow.
The escrow agreement normally stipulates that if the supplier goes out of business, or breaches a court order to meet contractual obligations under the license such as maintenance, support, development and supply of upgrades, the licensee may demand access to the source code for limited purposes.
This generally means the right to make a backup copy, maintain, correct and keep the program basically operational.
Escrow arrangements are confidential, and no intellectual property rights in the software ever pass to a licensee when escrow rights are exercised.
Where a dispute arises between the parties to the escrow, the escrow agent must remain strictly impartial. Arbitration is the preferred method of resolution of such disputes.
Not every business needs a software escrow, but unless source code is supplied with the run-time version under the license, an escrow is vital for customized software such as that used by accountants, lawyers, doctors, dentists, architects, engineers and real estate agents.
These types of service providers tend to rely on sophisticated enterprise applications both to support their clients and run their own businesses, and prudent auditors will want to see a software escrow in place before signing off their accounts.
Software suppliers can provide for an escrow as an itemized cost under the license, price dependent on service level and risk factors for the escrow agent.
Licensees may not welcome an additional overhead, but would be wise to regard software escrow as a cheap and practical form of insurance for key business assets.
For more information on source code or Software Escrows, please feel free to mail us at info@escrowtech.in
The escrow agent typically receives sealed CD-ROMs verified by the supplier to contain the source code of the licensed program(s).
These are lodged in secure storage (Ideally the Escrow agents facility) and lodgment details registered and notified to licensees.
This process is repeated each time the supplier issues an upgrade.
The program’s object code (machine-readable version) and often other information such as flow-charts and data layouts necessary for developers to understand and modify the software will also be included in the escrow.
The escrow agreement normally stipulates that if the supplier goes out of business, or breaches a court order to meet contractual obligations under the license such as maintenance, support, development and supply of upgrades, the licensee may demand access to the source code for limited purposes.
This generally means the right to make a backup copy, maintain, correct and keep the program basically operational.
Escrow arrangements are confidential, and no intellectual property rights in the software ever pass to a licensee when escrow rights are exercised.
Where a dispute arises between the parties to the escrow, the escrow agent must remain strictly impartial. Arbitration is the preferred method of resolution of such disputes.
Not every business needs a software escrow, but unless source code is supplied with the run-time version under the license, an escrow is vital for customized software such as that used by accountants, lawyers, doctors, dentists, architects, engineers and real estate agents.
These types of service providers tend to rely on sophisticated enterprise applications both to support their clients and run their own businesses, and prudent auditors will want to see a software escrow in place before signing off their accounts.
Software suppliers can provide for an escrow as an itemized cost under the license, price dependent on service level and risk factors for the escrow agent.
Licensees may not welcome an additional overhead, but would be wise to regard software escrow as a cheap and practical form of insurance for key business assets.
For more information on source code or Software Escrows, please feel free to mail us at info@escrowtech.in
Thursday, December 15, 2005
Investors/ Lenders benefit - IP Audit Trail
In connection with an investment in or loan to a company, an investor or lender may require the company to participate in the IP Audit Trail Program.
The IP Audit Trail Program can be modified to give the investor or lender the right to receive releases or copies of Deposit Materials from the EscrowTech Depository. The company would not be allowed to have Deposit Materials removed from the Depository without the investor’s or lender’s approval.
In this manner, the investor or lender can better document and secure the intellectual property or technology on which it is basing an investment or loan. It makes it more difficult for the principals or management of the company to walk away from the company (leaving the investor or lender with a failed company) only to begin over again with a new company that takes advantage of the previous company’s intellectual property and technology.
Please note that depending on the level of protection and the procedures desired by the parties, a software or technology escrow may be a better alternative - see a description of EscrowTech’s escrow services
The IP Audit Trail Program can be modified to give the investor or lender the right to receive releases or copies of Deposit Materials from the EscrowTech Depository. The company would not be allowed to have Deposit Materials removed from the Depository without the investor’s or lender’s approval.
In this manner, the investor or lender can better document and secure the intellectual property or technology on which it is basing an investment or loan. It makes it more difficult for the principals or management of the company to walk away from the company (leaving the investor or lender with a failed company) only to begin over again with a new company that takes advantage of the previous company’s intellectual property and technology.
Please note that depending on the level of protection and the procedures desired by the parties, a software or technology escrow may be a better alternative - see a description of EscrowTech’s escrow services
IP Audit Trail - In Relation to Copy Rights
Authorship, Ownership and Independent Creation.
Deposit Materials deposited with EscrowTech can include virtually any form of copyrightable subject matter (any “work of authorship”), e.g., documents, drawings, computer programs, data bases, photographs, and other works of authorship.
The date of deposit with EscrowTech is evidence that authorship (or creation) of the work must have predated the date of deposit.
Software development projects can be tracked, showing dates and stages of development.
All of this can be important in the context of legal disputes concerning authorship of copyrightable works and therefore ownership of the copyrights.
The Program can be used to establish prior or independent authorship of works. It can be useful in supporting both claims and defenses.
Deposit Materials deposited with EscrowTech can include virtually any form of copyrightable subject matter (any “work of authorship”), e.g., documents, drawings, computer programs, data bases, photographs, and other works of authorship.
The date of deposit with EscrowTech is evidence that authorship (or creation) of the work must have predated the date of deposit.
Software development projects can be tracked, showing dates and stages of development.
All of this can be important in the context of legal disputes concerning authorship of copyrightable works and therefore ownership of the copyrights.
The Program can be used to establish prior or independent authorship of works. It can be useful in supporting both claims and defenses.
IP Audit Trail - In Relation to Patent Rights
Under the patent laws, the ability to establish and corroborate “conception of the invention” and an “actual reduction to practice of the invention” can be critical in a dispute with other companies or inventors claiming to be the first to invent and therefore entitled to the patent.
Documents, working prototypes, computer programs (for software inventions), and other materials deposited with EscrowTech can corroborate our client’s claims of first inventor ship. These Deposit Materials can show conception of the invention or can be in the form of an actual reduction to practice, e.g., a working sample of the invention.
Without adequate corroboration, patent rights can be lost to another person or company who may be a competitor or who may license the patent rights to a competitor!
Documents, working prototypes, computer programs (for software inventions), and other materials deposited with EscrowTech can corroborate our client’s claims of first inventor ship. These Deposit Materials can show conception of the invention or can be in the form of an actual reduction to practice, e.g., a working sample of the invention.
Without adequate corroboration, patent rights can be lost to another person or company who may be a competitor or who may license the patent rights to a competitor!
Wednesday, December 14, 2005
Software Escrow - The Editors desk
The source code escrow does indeed offer a significant amount of protection for software licensees against vendor bankruptcy. As noted prior, because of the gaps left open in the Code, the amendments fall short of providing a software licensee with adequate protection. However, the escrow does not in and of itself provide an adequate level of protection sought by licensees. Nevertheless, this practice can be an extremely effective source of protection for licensees when used in conjunction with a meticulously drafted licensing and escrow agreement. There are certain points a licensee should be sure to include in its licensing and escrow agreements to maximize the protection of the escrow.
First, the licensee should negotiate a clause that gives the licensee the right to decide when an event triggering release has occurred. In addition, the licensee should include terms in the escrow agreement that clearly spell out which events are “triggering events” for release of the source code.
First, the licensee should negotiate a clause that gives the licensee the right to decide when an event triggering release has occurred. In addition, the licensee should include terms in the escrow agreement that clearly spell out which events are “triggering events” for release of the source code.
Software Escrow - What its worth ..
Is it a Worthwhile Investment?
Most source code escrow agency companies advertise via the Internet and in technology trade journals. One commentator estimates that approximately “80% of all Fortune 1,000 firms have at least one software package on deposit with an escrow agent. Under the typical software escrow arrangement, the escrow serves as an independent repository for a vendor’s source code and any related documentation for a time generally equal to the term of the underlying software license. The vendor is generally required to make periodic deposits of updated, enhanced, and modified editions of the source code, or other variants of the licensed software, While providing an archival storage place for source code, the escrow also provides protection for the vendor’s trade secrets. The escrow agent is prohibited from divulging the trade secrets of the source code “until it receives notice of an event requiring release, or until it returns the source code to the vendor upon the termination of the escrow. In order to obtain the source code, a licensee must notify the escrow agent and the vendor that an event requiring the release of the source code has taken place. Such an event might be the inability or refusal of the vendor to maintain or update the software, or the insolvency of the vendor. When an escrow agent receives such notice, “the agent is required to notify the vendor that it will release the source code to the licensee unless the vendor objects in writing within a specified period of time. If the vendor objects, “the escrow agent is directed to hold the source code until ordered to release it by a court or by the vendor. However, if the vendor does not object, “the escrow agent is required to release a copy of the source code to the requesting licensee, retaining a copy for itself. Once the source code is released to a licensee, generally, the escrow agreement provides the licensee with the “rights and obligations respecting the source code similar to those which apply to the object code. These rights include the licensee’s right to “use the source code to maintain licensed programs, subject to the obligations not to disclose the source code to third persons and to return or destroy the source code upon the termination of the license. To avoid possible lengthy and expensive litigation, the escrow agreement should be meticulously drafted to effectively notify the parties when a release event occurs.
For more information regarding source cod escrows mail us at info@escrowtech.in
Most source code escrow agency companies advertise via the Internet and in technology trade journals. One commentator estimates that approximately “80% of all Fortune 1,000 firms have at least one software package on deposit with an escrow agent. Under the typical software escrow arrangement, the escrow serves as an independent repository for a vendor’s source code and any related documentation for a time generally equal to the term of the underlying software license. The vendor is generally required to make periodic deposits of updated, enhanced, and modified editions of the source code, or other variants of the licensed software, While providing an archival storage place for source code, the escrow also provides protection for the vendor’s trade secrets. The escrow agent is prohibited from divulging the trade secrets of the source code “until it receives notice of an event requiring release, or until it returns the source code to the vendor upon the termination of the escrow. In order to obtain the source code, a licensee must notify the escrow agent and the vendor that an event requiring the release of the source code has taken place. Such an event might be the inability or refusal of the vendor to maintain or update the software, or the insolvency of the vendor. When an escrow agent receives such notice, “the agent is required to notify the vendor that it will release the source code to the licensee unless the vendor objects in writing within a specified period of time. If the vendor objects, “the escrow agent is directed to hold the source code until ordered to release it by a court or by the vendor. However, if the vendor does not object, “the escrow agent is required to release a copy of the source code to the requesting licensee, retaining a copy for itself. Once the source code is released to a licensee, generally, the escrow agreement provides the licensee with the “rights and obligations respecting the source code similar to those which apply to the object code. These rights include the licensee’s right to “use the source code to maintain licensed programs, subject to the obligations not to disclose the source code to third persons and to return or destroy the source code upon the termination of the license. To avoid possible lengthy and expensive litigation, the escrow agreement should be meticulously drafted to effectively notify the parties when a release event occurs.
For more information regarding source cod escrows mail us at info@escrowtech.in
Friday, December 09, 2005
Software Escrow - As Collateral for investment sought
A software and Technology Escrow has several advantages and one of them is:
The Source code of the Escrowed material could be used as collateral in the scenario wherein a software vendor approaches a venture capitalist for capital to further develop his business.
The venture capitlist confidennce in the company increases, in that he has a right over the intellectual property of the company in case the company winds up. This will not be the core collateral or fulcrum on which the decision is taken but it could provide a very vital advantage, after all the future devlopments of software is being done with the money pumped in by the venture capitalist.
This is just one such unique situation, look out for others in future.
May i remind you that, should you need a software escrow or any information on a software escrow, kindly log onto www.escrowtech.in or mail us at info@escrowtech.in
The Source code of the Escrowed material could be used as collateral in the scenario wherein a software vendor approaches a venture capitalist for capital to further develop his business.
The venture capitlist confidennce in the company increases, in that he has a right over the intellectual property of the company in case the company winds up. This will not be the core collateral or fulcrum on which the decision is taken but it could provide a very vital advantage, after all the future devlopments of software is being done with the money pumped in by the venture capitalist.
This is just one such unique situation, look out for others in future.
May i remind you that, should you need a software escrow or any information on a software escrow, kindly log onto www.escrowtech.in or mail us at info@escrowtech.in
Software Escrow - The General Guide Lines
While the basic outline of a software escrow may sound simple, it turns out that these are relatively complex deals. While many of the companies that handle escrows have model agreements on the Web, which make for a good starting point and certainly an improvement on reinventing the wheel, the key word is model agreement.
Every deal is different. As many of these as I've done, I've never had two deals that used the same escrow agreement. There are traps for the unwary and inexperienced throughout the process. Many issues will be the subject of often intense negotiation. As you delve into this area, you'll find that many areas of the law are implicated including bankruptcy and intellectual property law. Do it wrong and a bankruptcy court may prevent the release from escrow although you have an agreement that would appear to require it. Mess up on the intellectual property side and you may find out that you don't have the license you need to do what you thought you could with the source code once you have it.
Here are three quick tips on doing this right.
Make sure that your agreement requires them to promptly deposit revised source code once they release a new version. It won't be pretty if you get the source code for version 1.0 when you're using version 4.1. You have to ensure that somebody in your organization is responsible for monitoring these future deposits.
The second thing you need to do is verify that they've escrowed everything that is supposed to be escrowed and that the CD-ROM or other media is holding what it purports to be holding. I would suggest to you that once you get the source code released from escrow is not the time to find out that the escrowed CD-ROM has a video game, but not your software.
To verify, you'll need to have an agreement with your developer to have a trusted third party work with the source code to confirm that it is what it purports to be and that it's complete. Escrow without verification is a "No Win" situation. The problem with verification is that it can be expensive.
Every deal is different. As many of these as I've done, I've never had two deals that used the same escrow agreement. There are traps for the unwary and inexperienced throughout the process. Many issues will be the subject of often intense negotiation. As you delve into this area, you'll find that many areas of the law are implicated including bankruptcy and intellectual property law. Do it wrong and a bankruptcy court may prevent the release from escrow although you have an agreement that would appear to require it. Mess up on the intellectual property side and you may find out that you don't have the license you need to do what you thought you could with the source code once you have it.
Here are three quick tips on doing this right.
Make sure that your agreement requires them to promptly deposit revised source code once they release a new version. It won't be pretty if you get the source code for version 1.0 when you're using version 4.1. You have to ensure that somebody in your organization is responsible for monitoring these future deposits.
The second thing you need to do is verify that they've escrowed everything that is supposed to be escrowed and that the CD-ROM or other media is holding what it purports to be holding. I would suggest to you that once you get the source code released from escrow is not the time to find out that the escrowed CD-ROM has a video game, but not your software.
To verify, you'll need to have an agreement with your developer to have a trusted third party work with the source code to confirm that it is what it purports to be and that it's complete. Escrow without verification is a "No Win" situation. The problem with verification is that it can be expensive.
Thursday, December 08, 2005
ETI's Editor's Desk
This is a nightmare you wish will end with your waking up. Your company spends a crore or more to license some software. Then the company you paid a crore or more goes bankrupt. Now you have a crore plus worth of orphaned software. I would not like to in the position you are in, if the situation explained above does occur.
"This scenario will not occur….in the case of my company" , the Commonest quote. In today’s business climate we all know how volatile different segments are; especially the software segment. In a very limited space of time companies face the “Prince to Pauper” Syndrome. So why take a risk.
ETI Shrinks the Problem
When you license software, you typically get a license to use what's called the "object code." Object code is the machine-readable code. Not even the best of computer wizards you know can read object code.
Mere humans read and work in "source code." Source code is simply computer code humans can read. If your software developer goes under or refuses to support you, you'll need the source code if you're going to have any hope of hiring your own programmer to fix bugs, develop new features, or make any changes in the computer code you're using.
All’s Well that ends well – Your Solution
Here's the rub. You want to have the source code in case you need it. Your developer doesn't want to give it to you because they consider it their ultimate trade secret. The problem is that from their perspective they're right. Developers never want to give you the source code because it's their lifeblood. It's the secret sauce that prevents you from easily stealing their intellectual property.
It's looking like a stalemate, but it doesn't have to be. The compromise is a source code escrow. The typical setup will have the developer deposit the source code in escrow with a trusted third party. The escrow agreement requires that the escrow agent not release the source code to you unless certain release conditions are met. These conditions will typically be things like the developer's bankruptcy or failure to support you as required by your agreement.
This is the basic solution, but to know more about escrows log onto www.escrowtech.in or mail us at info@escrowtech.in
"This scenario will not occur….in the case of my company" , the Commonest quote. In today’s business climate we all know how volatile different segments are; especially the software segment. In a very limited space of time companies face the “Prince to Pauper” Syndrome. So why take a risk.
ETI Shrinks the Problem
When you license software, you typically get a license to use what's called the "object code." Object code is the machine-readable code. Not even the best of computer wizards you know can read object code.
Mere humans read and work in "source code." Source code is simply computer code humans can read. If your software developer goes under or refuses to support you, you'll need the source code if you're going to have any hope of hiring your own programmer to fix bugs, develop new features, or make any changes in the computer code you're using.
All’s Well that ends well – Your Solution
Here's the rub. You want to have the source code in case you need it. Your developer doesn't want to give it to you because they consider it their ultimate trade secret. The problem is that from their perspective they're right. Developers never want to give you the source code because it's their lifeblood. It's the secret sauce that prevents you from easily stealing their intellectual property.
It's looking like a stalemate, but it doesn't have to be. The compromise is a source code escrow. The typical setup will have the developer deposit the source code in escrow with a trusted third party. The escrow agreement requires that the escrow agent not release the source code to you unless certain release conditions are met. These conditions will typically be things like the developer's bankruptcy or failure to support you as required by your agreement.
This is the basic solution, but to know more about escrows log onto www.escrowtech.in or mail us at info@escrowtech.in
Wednesday, December 07, 2005
Software Escrow - Stay Ahead
As an independent, neutral escrow agent, EscrowTech India provides escrow management services and the best physical protection of the source code at our state-of-the-art, maximum-security storage facilities. Our escrow agreement is simple, straightforward and easy to understand, significantly reducing your legal expenses. The source code is only released to licensed users under specific terms of the agreement.
Source code escrow offers more than just security and protection. A source code escrow enhances your product with many value-added benefits, all of which have the potential to translate into profits for your software business.
A source code escrow provides a cost-effective solution to your customer's basic concern: How will the software be supported if you go out of business? By escrowing the source code in advance, you can anticipate and answer a licensee's need for long-term software support and maintenance. Source code escrow will give you the edge on your competition by winning the trust and confidence of the customer.
Source code escrow offers more than just security and protection. A source code escrow enhances your product with many value-added benefits, all of which have the potential to translate into profits for your software business.
A source code escrow provides a cost-effective solution to your customer's basic concern: How will the software be supported if you go out of business? By escrowing the source code in advance, you can anticipate and answer a licensee's need for long-term software support and maintenance. Source code escrow will give you the edge on your competition by winning the trust and confidence of the customer.
THe Benefits of a software Escrow - ETI
How Source Code Escrow Benefits the Developer
• Establishes clear ownership
• Demonstrates efforts to protect the trade secrets that make your intellectual property valuable (You must take steps to guard your trade secrets before a court will consider them your confidential property.)
• Protects against fraudulent claims by employees or competitors
• Helps increase sales by providing a cost-effective solution to your customers' need for assurance of program maintenance
• Can be used as collateral for financing from banks or investors
How Source Code Escrow Benefits the User
• Protects your investment in technology
• Ensures the transfer of proprietary information to you should the developer declare bankruptcy
• The source code will remain updated and intact
• Ensures long-term maintenance of licensed software
• Easy to enroll as a licensee
• Establishes clear ownership
• Demonstrates efforts to protect the trade secrets that make your intellectual property valuable (You must take steps to guard your trade secrets before a court will consider them your confidential property.)
• Protects against fraudulent claims by employees or competitors
• Helps increase sales by providing a cost-effective solution to your customers' need for assurance of program maintenance
• Can be used as collateral for financing from banks or investors
How Source Code Escrow Benefits the User
• Protects your investment in technology
• Ensures the transfer of proprietary information to you should the developer declare bankruptcy
• The source code will remain updated and intact
• Ensures long-term maintenance of licensed software
• Easy to enroll as a licensee
Monday, December 05, 2005
Escrowless – The Risk
It is amazing how in our day to day lives for our problems, we have solutions at hand, yet prefer to take a risk.
There have been several cases in the west wherein companies have suffered huge loses due to the non existence of an escrow. Do you want your company to be the first company that suffers losses due to the non existence of an escrow and let others learn from your example?
Be proactive, be safe, and be secure. Call us, mail us or log onto our website for further information about Software & Technology escrows. Give us an opportunity to provide you with all the information you ever need and you will see and know the benefit an escrow brings with it.
A company which licenses software, especially customized software must have an escrow arrangement in place. EscrowTech India provides you and your organization with a unique opportunity to have a software escrow in India.
The advantages to your organization both as a software vendor and a software licensee are multifold.
We at EscrowTech India are a joint venture with EscrowTech International Inc. USA; one of the worlds most trusted and patronized escrow agents. With the Indian software Industry reaching new heights, and the number of software licensees ever increasing in India, EscrowTech India is focused on proving professional software and technology escrow solutions to the Indian industry.
There have been several cases in the west wherein companies have suffered huge loses due to the non existence of an escrow. Do you want your company to be the first company that suffers losses due to the non existence of an escrow and let others learn from your example?
Be proactive, be safe, and be secure. Call us, mail us or log onto our website for further information about Software & Technology escrows. Give us an opportunity to provide you with all the information you ever need and you will see and know the benefit an escrow brings with it.
A company which licenses software, especially customized software must have an escrow arrangement in place. EscrowTech India provides you and your organization with a unique opportunity to have a software escrow in India.
The advantages to your organization both as a software vendor and a software licensee are multifold.
We at EscrowTech India are a joint venture with EscrowTech International Inc. USA; one of the worlds most trusted and patronized escrow agents. With the Indian software Industry reaching new heights, and the number of software licensees ever increasing in India, EscrowTech India is focused on proving professional software and technology escrow solutions to the Indian industry.
Friday, December 02, 2005
Software & Technology Escrow– News letter
Definitions of an escrow:
“Escrow is a legal arrangement whereby a thing (often money, but sometimes other property such as art, a deed of title, or software source code) is delivered to a third party (called an escrow agent) to be held in trust and safe custody, pending a contingency or the fulfillment of a condition or conditions in a contract. Upon that event occurring, the escrow agent will deliver the thing to the proper recipient; otherwise the escrow agent is bound by her or his fiduciary duty to maintain the escrow account.”
“A written agreement between two or more parties providing that certain instruments or property be placed with a third party in safe custody to be delivered to a designated person upon the fulfillment or performance of some act or condition.”
Software / Source Code Escrow:
These are two definitions of an escrow and the same applies to Software & Technology Escrows. In case of software escrows the source code is the subject matter otherwise called the “Escrow Property” or “Deposit Materials” to be escrowed. The subject matter is the source code, the only variant being the terminology used by different escrow agents.
Technology Escrow:
Technology escrow functions similar to software escrow except that subject matter to be deposited in an escrow could be Technological drawings, formulas etc. Companies could use a technology escrow for anything from Heart Valve Prototypes to Chemical Reactor Drawings.
Escrows are popular and very widely used by licensees in the west especially in USA, U.K and Europe. In India the concept of escrows is yet to sink in, one crucial reason was the absence of an escrow service provider, however even that void has been filled with the emergence of EscrowTech India.
EscrowTech India is an Indo-US joint venture company with EscrowTech International Inc. USA, one of the world’s most trusted software escrow agents.
For information on software & technology escrows log onto www.escrowtech.in or mail info@escrowtech.in
“Escrow is a legal arrangement whereby a thing (often money, but sometimes other property such as art, a deed of title, or software source code) is delivered to a third party (called an escrow agent) to be held in trust and safe custody, pending a contingency or the fulfillment of a condition or conditions in a contract. Upon that event occurring, the escrow agent will deliver the thing to the proper recipient; otherwise the escrow agent is bound by her or his fiduciary duty to maintain the escrow account.”
“A written agreement between two or more parties providing that certain instruments or property be placed with a third party in safe custody to be delivered to a designated person upon the fulfillment or performance of some act or condition.”
Software / Source Code Escrow:
These are two definitions of an escrow and the same applies to Software & Technology Escrows. In case of software escrows the source code is the subject matter otherwise called the “Escrow Property” or “Deposit Materials” to be escrowed. The subject matter is the source code, the only variant being the terminology used by different escrow agents.
Technology Escrow:
Technology escrow functions similar to software escrow except that subject matter to be deposited in an escrow could be Technological drawings, formulas etc. Companies could use a technology escrow for anything from Heart Valve Prototypes to Chemical Reactor Drawings.
Escrows are popular and very widely used by licensees in the west especially in USA, U.K and Europe. In India the concept of escrows is yet to sink in, one crucial reason was the absence of an escrow service provider, however even that void has been filled with the emergence of EscrowTech India.
EscrowTech India is an Indo-US joint venture company with EscrowTech International Inc. USA, one of the world’s most trusted software escrow agents.
For information on software & technology escrows log onto www.escrowtech.in or mail info@escrowtech.in
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