Software Escrow

Why Use It?

Software Escrow, sometimes known as Source Code Escrow, is an essential risk management tool for modern business.

In today's commercial environment companies and individuals rely heavily on information technology. Software is, for most businesses, not only the most critical but also the most vulnerable component of such information technology. Businesses do not only become dependent on the software, they also become dependent upon the software provider.

Because software, particularly purpose-developed or customised software, requires maintenance and invariably involves updating, businesses have a vital interest in ensuring that upgrading continues. Rarely under a licence agreement do end users obtain access to those components of the software system necessary for the understanding, maintaining or upgrading of the software; they gain access to object code rather than source code and other vital material. The presence of the software provider therefore becomes as integral to the business of the end user as the software itself.

Continued access to the software provider cannot be guaranteed and as a result commerce at large, as a massive user of information technology, is constantly at risk. End users such as resellers, manufacturing industries, banks and financial houses, whose success is dependent upon third party proprietary technology, need the reassurance that the Software Escrow provides.

Software proprietors have different, but related concerns. Their software represents a significant investment in research and development, one that is all too easily misappropriated as current statistics on software piracy demonstrate. The integrity of the source code is vital to the protection of their intellectual property. For this reason source code and supporting material is rarely supplied under a software licence agreement.

Software Escrow is designed to provide businesses with access to the source code and supporting material necessary to maintain the software if the software provider cannot or will not do so, under conditions in which the risk to intellectual property of the software proprietor is minimised.

Assurex Escrow Pty Ltd protects both developers and end users, by holding and maintaining the critical technology for their mutual benefit and security.

Prudent businesses do not leave their future to chance. Software Escrow is the only certain method of ensuring access to source code and supporting material when the need to do so can be critical to an organisation's continuing operations.

The Software Developer

Disclosure of existing Software Escrow with Assurex Escrow can only enhance your user base potential and reflect well on your organisation. Your customers will recognise and appreciate the care they receive from you and the steps you take to provide a secure investment for them. You will find our services simple to use, yet always secure.

Assurex Escrow Pty Ltd enjoys a solid reputation within the Information Technology industry and is a member of the Australian Information Industry Association.

Currently Australian Federal and State Governments specify Software Escrow as a basic requirement of the Government Information Technology Conditions (GITC).

Software Escrow also provides compelling evidence of the ownership of the intellectual property rights attaching to the source code and supporting material held in escrow.


The End User

A Software Escrow arrangement permits you to protect your investment in licensed software technology, whether it is a specific application, purpose written for you, or an expensive "off -the-shelf" modification.

Access to source code and supporting material will dramatically decrease the risk of interruption to your business in the event of software company failure, refusal or inability to provide continued maintenance and support.

Protection of a Software User's investment lies in the certainty that the licensed software can be maintained - ideally with the assistance of the software developer but also, and most importantly, without it. Access to source code and supporting material is the only way to establish this certainty.

The Lawyers

Our standardized agreements and services will save you and your clients valuable time. Should customisation of our standard agreements be required, we will provide quick and efficient support. We are also happy to consider agreements drafted by our clients' legal advisers.

Our standard agreements can be made available by e-mail or facsimile transmission. If required we can prepare all copies of the agreements, ready for execution and have them couriered to you in the shortest possible time.

We have for many years dealt with many lawyers on an international basis, and we are happy to consider escrow agreements customized to suit international legislative requirements if necessary.

Federal Court - Anton Pillar Orders*

In some cases it maybe appropriate for the Court to order that the material seized pursuant to an Anton Pillar order be delivered to an independent person to be held without disclosure to the applicant pending an inter partes hearing of the matters in issue, at which the respondent may present argument why the material should no be disclosed to the applicant. Assurex Escrow is ideally placed to provide this service.

(* Federal Court of Australia. Practice Note No. 10 dated 8 April 1994)

Software Distributors & Sales Staff

Loss of marketing and licensing opportunities
Many sales initiatives fail simply because larger organisations are nervous about dealing with smaller, seemingly more fragile, software companies. Some of our most successful clients have solved this problem providing a user base guarantee of access to source code and supporting material in the event of developer or distributor business failure.

An escrow arrangement demonstrates the bone fides of a supplier's concerns for the security of its user base.

Intellectual Property Risk Management

Minimise the risk of Costly and time-consuming litigation
An escrow arrangement cannot prevent someone infringing your intellectual property, but it can provide proof of ownership and thus save you money.

Enforcing ownership of intellectual property rights can be a costly and time-consuming matter, especially if provenance is the issue. Escrow, whether it be Source Code escrow or escrow of other valuable intellectual property, will provide tangible and compelling evidence of your claim of ownership and will therefore reduce costs and save time in the event legal action to protect your intellectual property is necessary.