Software Escrow Guide

Introduction Escrow services Escrow contents Release conditions Escrow lawyer Summary

Software escrow - summary

All types of escrow involve use of a trusted third-party. Software escrow is a specialized area of general escrow. The key concern with software escrow is usually that you (the software user) can access the software source code and sufficient technical documentation so you can build for yourself a version of the executable software that you can understand and use.

You can expect your software escrow provider to contribute some specialized skills at not much cost - standard legal contracts, secure storage and ongoing administration of the escrow process. These services are fairly standard and can be compared across escrow providers without too much difficulty. You need to carefully consider the issue of jurisdictions in any software escrow agreement.

The content of what gets placed in escrow is critical. Your best approach is to tie that content to specific releases of the software - whether you receive those releases directly or not. You need to able to prove that the content remains usable and uptodate. The software vendor should be reasonable here e.g. allow partial source code inspections or "clean-room" builds of the entire release. However you must respect the vendor's legitimate concern that you should obtain access to all (or the vast majority) of their proprietary source code only as required to verify the escrow contents.

There are conditions in the software escrow contract that trigger the eventual release of the full escrow contents to yourself. These conditions should cover the business risks that led you to consider an escrow arrangement in the first place. The best example here is the bankruptcy of the vendor. Other conditions are harder to define. For example, there might be no clear definition of when the vendor starts to discontinue support and ongoing development of the software. You should negotiate these release conditions carefully with your software vendor. You can not expect them to grant you an unwarranted say over the current/future direction of their business.

Legal disputes around software agreements can be very difficult - and expensive - to resolve. This applies to both software escrow contracts and other software licensing/support contracts. The use of a trusted expert third-party as arbitrator can significantly reduce time/costs and lead to reasonable compromises rather than "winner-takes-all" legal judgments.

You need to ensure that software escrow gives you what you want without jeopardizing your longer-term relationship with your software vendor. Whatever legal agreements say, software is still a black art and there are lots of subtle ways that a vendor can degrade the service level they give you if they feel their relationship with you is more antagonistic than cooperative. You want to keep the vendor on your side.

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