Have you heard the phrase “software escrow?”
The best software usually comes from a team of clever computer science engineers. It’s an invention to the same degree that a new product is. Due to the increased necessity of quality software, it’s now vulnerable to theft and tampering. Also, since software is intellectual property, stealing it is considered an intellectual threat, which is a crime punishable by heavy penalties. From vendors to buyers, everyone has something to lose in a bad transaction. That’s why software escrow has become a tool for preventing legal issues.
What is Software Escrow?
A software escrow is an agreement between two parties: licensor and licensee. Under this agreement, the licensor imparts the source code or file through an escrow agent to the licensee. There is an agreement between the two upon certain conditions which are agreed upon by both of them.
The purpose of this agreement before the deposit of software is the same as an insurance package for your house or property. It will safeguard the software in many ways in case of a problem.
Why You Need This Service?
Most of the time, a software escrow is requested when the individual licensing it realizes how essential the program or app is to their company’s growth. In other cases, a software can directly impact the revenue of the company and its operations. You may also want to invest in escrow services when licensing or selling a valuable piece of code. This will protect you in selling or licensing your program while safeguarding the funds received.
What Are the Components of Software Escrow?
Usually, the agreement consists of the standard details such as:
- The deposit of software with the escrow agent and it’s updates which will be held for the licensee.
- All the details and documents concerning the software like how will it be built or compiled. The tools and names are all detailed in the documents.
- The information of the third parties whose developmental tools are used in the software along with their contact information.
These are basic things that are usually part of the software escrow agreement. Each party has to go through them before signing the deal.
Finding the Right Escrow Agent
You need to be careful when you are looking for a software escrow agent, because this third party agents play a great role in the agreement. A reputable escrow agent will take care of the key factors, which should be part of a healthy agreement between licensor and licensee.
Whether you want to purchase or sell digital intellectual property, neglecting the use of an escrow company is not in your best interests. Therefore, look for a reputable company where you can seal the deal with a trustworthy agent.
If you have questions about how software escrow works, contact the experts at Bay Area Escrow.