Software Escrow 101

Today more and more software license agreements enforce a requirement for a software escrow agreement to be put in place. The idea behind a software escrow agreement is to protect the intellectual property (IP) interests of the software developer while protecting the long term usability of software for the client.

To find out more about our software escrow service take a look through this list of frequently asked questions (FAQ) and discover the benefits of software escrow with Escrow London.

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What should I look for when selecting a software escrow vendor?
  • Service
    • How easy is it to deal with the vendor?
    • Is the vendor flexible in their ability to amend agreements?
    • How responsive is the vendor to your questions?
  • Security
    • Does the vendor maintain their own data centre?
    • Does the vendor maintain ISO27001 and ISO9001 certification?
    • Does the vendor provide secure SFTP uplink to deposit data?
  • Pricing
    • Does the vendor charge a setup fee?
    • Does the vendor charge to make changes to agreements?
    • Does the vendor charge a release fee?
Is there really a difference between software escrow vendors?

Yes! There are many software escrow vendors in the marketplace. It is imperative to check their data security accreditations and their level of customer service.

What is source code verification?

Source code verification is the independent testing of the source code to ensure that it can be rebuilt into a working binary. This test can be performed at the site of the developer or on a clean environment in the Escrow London lab.

What is the process for dispute resolution?

Under the agreement, there is a set process for dispute resolution which is by an independent arbitrator appointed by Escrow London. The decision of the arbitrator is binding.

What happens if a release event occurs?

In the event of a release event being triggered, the beneficiary must make contact with Escrow London to advise of such an event. Escrow London will make contact with the developer and provide an opportunity to provide contrary instructions. If no contrary instructions are received after a set period of time, Escrow London will release the source code and related documentation to the beneficiary.

What events are usually defined as release events?

A software escrow agreement outlines the responsibilities of all the parties and includes the pre-defined release conditions. The release conditions usually includes events such as bankruptcy, appointment of a receiver or the developer ceases trading. The release conditions can all be negotiated at the time of setting up the agreement.

Why is it important to have a software escrow agreement?

The objective of a software escrow agreement is to protect the intellectual property rights of the developer while providing comfort to the end user that if the software developer is unable or unwilling to support the software, the source code can be released to them.

What is software escrow?

Software escrow is a three party agreement between a software developer (the depositor), the end user (beneficiary) and the Escrow Agent. Under the agreement, the developer must periodically deposit with the escrow agent the source codes and other documentation related to the software.

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