| 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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Page updated 06.02.2010
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