| Simplifying
Software Escrow, Part I - Setup "The Escrow
Update"
June 2010 Issue
After more than a
decade in the business, we still receive calls
from companies in all industries (retail,
medical, government, energy, finance, etc.) who
“have never had to deal with software
escrow” before – but now it’s an
issue. The failures of many old and well
established firms in the past few years have
forced everyone to seek extra security.
When it comes to
protecting your technology assets, escrow makes
great business sense.
No other
vehicle or system simultaneously 1) Gives the
Developer third-party authentication of
his/her intellectual property by contract and
2) Secures the Licensee’s
(“Beneficiary’s”) interest or
investment in the technology, while actually
preserving the technology or intellectual
property.
However, getting
one of these "mysterious" software
escrow agreements in place wasn't always easy, no
thanks to convoluted terms and rigid escrow
agreements that gave the Parties no room for
discussion about managing their own intellectual
property. Talk of software escrow would
sound alarms of time-consuming negotiations
and legal fees that distracted IT professionals
from their real mission of creating and selling
technology.
Recognizing the
challenges that escrow presented at the
time, we launched our Online Client Services site in 2002 to help those
with little or no knowledge about software escrow
set up and maintain software escrow
accounts. Here, all of the functions needed
to setup and maintain an escrow account are
located in a single bookmark.
And understanding
that some people are leery of contracts or
legalese, we drafted single-beneficiary and multiple-beneficiary escrow agreements
in just a half-dozen easy-to-read pages
plus a few exhibits. While it might
have been a convoluted matter years ago
(and it was), setting up a software
escrow agreement today is fairly quick and
easy.
To get started at
the Setup page, all you need is some
basic contact information for the Depositor and
Beneficiary and some info about the product.
Submitting this no-obligation form sends
the details to Guard-IT, where a soft copy of
your escrow agreement is prepared in MS Word
and then e-mailed back to you, usually on the
same business day. We also include a
helpful escrow checklist with the draft agreement
to outline the steps.
At this point,
edits and special terms that might be negotiated
are added to the draft. Once the Parties
are satisfied with the terms, the document is
routed to the Depositor and Beneficiary for
signatures. The signed document
is then returned to Guard-IT by fax, mail
or PDF for final signatures. We then
return a fully executed copy to the Parties.
When the agreement
is signed, the few remaining steps to
complete the escrow are “downhill”, and
we will discuss them in the next two issues of
"The Escrow Update".
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1999-2012 Guard-IT Corp. All rights reserved.
Page updated 01.02.2012.
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