What is Software Escrow?

Protection in a License Agreement

What is Software Escrow?

 

A Software Escrow Arrangement is an agreement that protects both parties in a License Agreement. It provides a Licensee with access to a Technology Vendor’s intellectual property (i.e., source code and documentation), in the event that a specific release/triggering event agreed upon by the Parties occurs.

This works by having a Technology Vendor deposit their intellectual property with an agent of an escrow account, who will then in turn, store the intellectual property in a secure location. If a release/triggering event occurs, the agent will then release the intellectual property to the Licensee. The account is similar to that of taking out an insurance policy in order to safeguard the rights of both parties. 

A Software Escrow Arrangement permits a Licensee to maintain and enhance their investment in the event that a Technology Vendor is unable to continue its operations, while permitting a Technology Vendor to protects its interests.