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21 September 2022

Protect software IP with Software Escrow

Nearly every business relies on intellectual property (IP) assets to remain competitive in the marketplace, so it’s essential to protect against theft and illegal use of your IP. Your company likely already has some level of protection via trade secrets, copyrights, trademarks, or patents, but sometimes you need more.

How do you protect software intellectual property? A variation of a simple software escrow agreement – known as an “information escrow agreement” or “IP escrow agreement” – can be an important, low-cost, and practical tool to protect software intellectual property.

How do you protect software intellectual property?

A Software Escrow Agreement is a straightforward and effective way to protect software intellectual property. A Software Escrow Agreement with mutually-agreed terms between the software customer, software supplier, and an escrow agent, such as NCC Group is specifically designed to mitigate risk and protect the interests of all parties involved in software development and licensing.

When technology is placed into escrow, the service provider or developer can retain the IP rights, and the user gains the assurance that the software source code or other technology will be available if needed.

The independent, third-party escrow agent makes this happen by providing a secure repository and creating an agreement that specifies release terms, detailing under what circumstances the technology would be shared with the end user.

Specifically, with information escrow agreements (also known as IP escrow agreements), companies can protect business-critical information such as product designs, industrial formulas, or manufacturing processes – in fact, any type of business-critical information can be covered.

Download Sample Agreement

What are the benefits of software intellectual property protection?

  • Safeguard intellectual property rights in software development contracts.
  • Third-party archiving of IP and know-how in litigation settlements.
  • Benchmark the contribution of IP in joint ventures to establish each party’s contribution.
  • Strengthen the exit interview for key developers and put competitors on notice.
  • Provide the “smoking gun” if your IP is stolen or pirated.

How does Software Escrow protect software IP?

Here’s how it works. You document your IP development with an audit trail that is securely held with a neutral third party, like NCC Group. We date and timestamp each instance of software source code or other proprietary information you deposit. When each new deposit is made, it is preserved along with prior deposits in a secure vault so that the integrity of older versions already in escrow is maintained. The incremental development of your intellectual property is substantiated and documented with a methodical audit trail. In this way, a genealogy of the product is kept on record with the escrow provider, which can then confirm its legitimacy.

Companies using Software Escrow to protect software IP

Forward-thinking companies like BrightSource Energy understand how they can protect their valuable intellectual property assets via an IP escrow agreement. A pioneer in the solar energy industry, BrightSource provides a wide range of services from project design to plant control based on complex algorithms. BrightSource’s key asset is its breakthrough IP, including the software and its innovative algorithms, solar field design, and the know-how acquired from years in the business.

Documenting the build and technical know-how through IP escrow and verification added a level of reassurance for BrightSource at every stage. With this practical approach, IP escrow enables companies to gain additional protection for their intellectual property assets with a verifiable audit trail of IP development.

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