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Introduction to technology escrow

Escrow is a contractual agreement intended to protect the parties and limit risks during the development, supply and use of businesses’ key technologies.

When you have reached an agreement allowing third parties (clients, partners) to access items (databases, software, documents,...) you have deposited with a third party custodian, the terminology in use says these items are in "escrow" or that you have "put them under an access clause".

There are two main contractual methods using this mechanism:

  • a tripartite contract between the supplier, the beneficiary/beneficiaries, and APP;
  • a bipartite contract that can take the form of a clause in a wider contract (maintenance, licence, distribution...) entered into by the supplier and the beneficiary, or a specific contract between the supplier and APP (see access clause management).

Specifically, escrow requires:

  • one or more deposit(s) made with APP
  • and a prior agreement with conditions that allow one or more clearly defined beneficiaries to access the deposited elements.

There are a number of escrow agreements:

  • Software escrow which generally includes holding the source code and all documentation needed for operation.
  • Escrow applied to software as a service (Saas) which generally assures protection of the beneficiary’s data and service continuity in the event of breach by the service provider.
  • The escrow applies to knowledge, the manufacturing process, legal, marketing and commercial documentation ... This type of mechanism can be used in the context of company subcontracting, buy-back or sale contracts.

Why provide access to the digital creation you deposit with APP?

To secure the business relationship between the customer for software and its supplier, you can use APP to:

  • safeguard the items stored by the supplier
  • and provide them to clients, partners or users (the "Beneficiaries"), when contractually defined conditions are met. This generally occurs due to breach by the supplier, in the event of liquidation proceedings, failure in software maintenance, etc.

Using APP as a third party custodian of your software creations has several advantages:

A commercial case for your customers and partners

Providing access to the source code for your software ("escrow" for your software) can be a determining factor in your business relationships. This reassures clients, purchasers and users of your technology solutions that their investments are sustainable. You allow them to access your previous deposits with APP in the event of default on your part (bankruptcy, lack of maintenance…). They will then be able to continue using your creation and carry out corrective, development or regulatory maintenance.

The chance to ensure the content of your deposited creations

It is preferable to be able to "validate" the content deposited with your clients/partners before deposit operations, and specifically that it matches the latest software version installed at the client, and that the deposited items form a coherent and correctly documented whole. APP can accompany you in these control operations.

A strict framework of the procedure for accessing your "escrow" creations

APP has implemented a strict procedure for handling access demands for deposited items, which cannot be amended. This procedure is intended to secure our members’ deposited assets, respecting the confidentiality of the deposits and protecting them from abusive access requests.

For more information, contact us