For those companies dealing with technology and software, taking advantage of the technology escrow and management services offered by neutral third party agents is a smart move. It is hard to put a value on intellectual property, and software ownership is often unclear when one company has done the development, but another has paid for that development, but an escrow management service will help both the developer and the licensee or investor set up an agreement right near the beginning of the relationship, so that these matters are cleared up ahead of time.
In the software escrow agreement, drawn up by the technology escrow and management services, but with input from both companies, there will be certain trigger points, that, if they occur, may result in the escrow agent releasing the source code of the software to the licensee or investor. This way, if the vendor or developer does not perform any necessary updates of the software as they were supposed to according to the agreement, then the escrow agent can give the source code to the licensee so that they can get someone else to help update the software and thus keep their business up and running. This might not seem ideal, but not having access to the source code that the software they are using has can be devastating to any company.
Putting the source code in escrow services is therefore a safety or protection move that can help reduce risks, and hopefully reduce losses caused by non- functioning software for example. It is unfortunate that this has become necessary, but with so many changes going on in the business world, with company buy-outs, and bankruptcies, and change of employees too, having an escrow agreement in place with a reputable escrow management service is the sensible approach to what could be a horrendous problem.
Technology will continue to change at an increasingly fast pace, so think carefully about any intellectual property that you think you own, and see whether that needs to be held in escrow for everyone’s protection. There are now many different escrow agreements that can be drawn up for software and source code, technology, as well as for money and other valuable assets. They are well worth investigating carefully to see how they can help you and your company. Do your due diligence in researching the technology escrow companies. Check their pricing, and their numbers of escrow dealings that have had source code given to the licensee. Look for negative comments by searching on the internet. Interview prospect escrow management services to make sure you feel comfortable with them and what they have to offer you.
Then take advantage of the best technology escrow and management services that you can find, and relax, for you will be adequately covered, provided your agreement was carefully constructed, and read by the appropriate lawyers to make sure it covers your particular needs.
Do be aware that there are some technology escrow and management services which protect both parties, that is both the buyer and the seller. In this case some of the funds that the purchaser pays will be held in escrow by the third party escrow company. These funds will only be released to the seller once all of the terms have been met, and both parties, and the escrow agent, working for the technology escrow and management services, are satisfied that all is settled as it should be according to the escrow agreement.
