| Staking Out
Intellectual Property Rights By
Ted Hughes, Senior Correspondent
LocalBusiness.com Business Profile, July 19, 2000
Software
escrow is one of those terms. It's right up there
with double indemnity and term life. They all
have a vaguely tomb-like quality to them.
If
you're not in just the right frame of mind when
you hear it, you'll feel the air in the room go
thick on you. As your own indifference engulfs
you, the guy who's telling you about software
escrow will recede into the wrong end of the
telescope.
Jim
Ford swims daily in the choppy waters of that sea
of indifference. But, really, once he manages to
get your attention, software escrow gets
interesting. Really.
Ford
explains that even he was pretty baffled by the
term the first time he heard it.
"I
got an e-mail from a friend in Bryan who's an
attorney, asking if I knew anything about
software escrow. One of their lawyer's needed it
for a client. I said I'd check into it."
Ford
ran every trap he knew, but came up dry.
"After
15 years of legal and technical publishing in the
Silicon Hills of Austin I'd never heard of
this," he recalls. "I thought nobody
here is doing this? It hit me like a lightning
bolt."
The
lightning bolt was Ford's new business idea, and
that has evolved into his company, Guard-IT Corp.
What
Ford has learned since he began to explore
software escrow -- basically title insurance for
geeks -- is that it is a rather useful tool.
Guard-IT
Corp. simply acts as a trusted third party with
whom a software maker, or anyone with
intellectual property, can store the IP. Doing
that establishes legal ownership. If a developer
has investors, it's also a good way for them to
secure the assets they're investing in. All this
of course is supposed to minimize legal disputes
should the deal go sour.
"It
doesn't replace a patent," Ford says,
"but if you're not going to spend the time
and money to pursue a patent, go ahead and put it
into escrow, because you're going to get IP
protection right away."
It
also is a useful way for developers who are new
to the business to establish credibility with
potential business partners and customers, Ford
says.
"When
they're in the first or second year of
operation," Ford says, "a developer may
have his product all developed and he's going out
to sell it. It's going to hit him in the face.
The first guy that's bigger is going to say:
'yeah, I love your product. You're a nice guy.
But we really don't know you from Adam, and we
need some assurance that our investment in your
product will be covered.'"
Software
escrow, Ford says, might sound like a
velvet-lined tomb, but it's really just another
way to protect your intellectual property.
Really.
Company
Name: Guard-IT Corporation
Industry:
Intellectual property protection, software
escrow, source code escrow
Product/Service:
Guard-IT is an independent, third-party escrow
company that secures intellectual property (IP),
including software source code, proprietary
material (e.g., databases, business plans). The
escrow agreement authenticates the developer's
ownership and first-use, and protects the
beneficiary's investment in the intellectual
property.
Year
Founded: 1999
Management:
Founder and CEO Jim Ford managed a number of
technology, business and legal publications in
print and online, including at the Austin
Daily Record and the Austin
American-Statesman.
Investors:
Self-funded
Strategic
Partners: Guard-IT has signed an
agreement with PricewaterhouseCoopers, LLP,
naming the software and intellectual property
escrow company as a seat-holder in connection
with PwC's Intellectual Property Exchanges
("IPEX"). Guard-IT also has a marketing
alliance with Associates Business Services, a
member of the 900-member International Business
Brokers Association. The company is also in
confidential negotiations with a major online B2B
marketplace and a computer hardware manufacturer.
Customers:
Representative technology development clients
include Dark Horse Systems, Semantic Designs and
Innovative Software Solutions. Beneficiaries
include Micron Technology, Rockwell Software and
Landata Systems, a subsidiary of Stewart Title
Company.
Competitors:
DSI, Ft. Knox, Iron Mountain
Fiscal
Year Revenues/Profit: Would not
disclose.
Strategy:
Cut the "paper chase" for software
developers by offering an online form to expedite
their escrow. Cut out the fees and paperwork of
enrolling and administering beneficiaries for the
developer. The goal is to serve an intellectual
property market that goes well beyond software
source code. Form alliances to broaden protection
for buyers and sellers of technology and
intellectual property.
What
Keeps Them Awake at Night: The numerous
applications and opportunities for rapid growth
in both domestic and foreign markets. The whole
technology industry, even the general business
community, is beginning to focus on the need to
protect intellectual property rights and secure
investments in technology and innovation.
Third-party escrow will be to technology transfer
what title insurance is to the mortgage industry.
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1999-2010 Guard-IT Corporation, Austin, Texas.
All rights reserved.
Page updated 01.05.2010
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