Escrow is the placing of something in safekeeping with an independent, third-party to preserve and protect it. For software or other technology, it is the deposit of source code, website or database contents, documentation or other intellectual property that developers wish to keep safe and accessible for themselves and for the benefit of clients who license or purchase their technology.
Source code isn't the only thing a developer should put into escrow. The following components and intellectual property, created by Developers and licensed to clients and IT managers, are subject to ownership disputes, theft, loss or other damage:
- Proprietary technology
- Build instructions & names/contact info for key team members
- Source code & unpublished support documentation
- Development ideas & outlines
- Marketing & financial plans
- Client, employee & vendor lists and databases
- Encryption keys & passwords
Anyone involved in the creation, development, licensing or use of software or other proprietary technology. Guard-IT's clients and referrers include software developers, programmers, licensees, web developers, database administrators and intellectual property & technology lawyers.
You may have your attorney assist you in drafting your escrow agreement (this is common). However, your attorney should not serve as the administering escrow agent. If a dispute over the source code, data or intellectual property arises, he or she could be disqualified from serving as your legal counsel in the dispute because of perceived bias and potential conflict of interest. Neither your attorney nor the other party's attorney would be perceived as unbiased in a dispute. The key to an effective escrow is an independent agent.
Guard-IT does not insure technology, nor does it provide insurance. However, as a third-party, Guard-IT provides security and assurance to all Parties by preserving the escrow deposit materials in a safe and secure environment. Your business insurance might only cover the monetary cost of your software and hardware if you have to file a claim. Escrow, on the other hand, actually eliminates the risk of a physical loss, because Guard-IT retains actual copies of the deposit materials.
Given the rapid changes and increasing competition in the IT industry, developers need the "competitive edge" that Guard-IT's escrow service offers new prospects and clients. Developers can be assured that their work is safely archived and protected by a legal contract, reducing the risk of ownership disputes or costly lawsuits. And, their sales and marketing teams can convey this value-added benefit of the escrow to new customers.
When it comes to ownership and first-use issues, Guard-IT provides "enforcement by contract", rather than by time-consuming disputes or costly litigation. In the event of an ownership dispute, Guard-IT independently authenticates the developer's ownership of the deposit materials and thus reduces the risk of litigation or an extended dispute. Lawyers also use Guard-IT on an interim basis to secure sensitive materials that are already in litigation.