What is Source Code Escrow and Why?

Source code escrow is the deposit of software source code with a third party escrow agent for secure storage and safe keeping. SCEC uses a secure vault at the main branch of a major chartered bank.

It is generally requested by software customers who want to be able to obtain access to the source code when the software developer can no longer support or maintain the software for pre-determined reasons such as bankruptcy.

Sometimes source code escrow is requested by companies who have trade secrets. Putting trade secrets in escrow can prove exactly what was intended to be kept confidential.

How to Establish Source Code Escrow

Step 1:
The Agreement

Source code escrow is created via contract between:

  • The software developer (licensor);
  • One or more software customers (licensee); and
  • The escrow agent (SCEC).

We're flexible. We can use our standard agreement or, for an additional fee, your own preferred form of agreement. In either case, we would be pleased to work with you to tailor an agreement to fit your requirements.

Step 2:
Your Information

For both the software developer (licensor) and software customer (licensee), please provide:

  • Full legal corporate name
  • Address
  • Phone Number
  • Contact Person
  • Description of the software to be placed in escrow

Step 3:
Agreement Review

Once you send us the agreement by fax or e-mail, an experienced SCEC staff member will review the agreement and provide timely feedback on the terms and conditions of the agreement. We aim to be fast and efficient.

Step 4:
Execute Agreement

Multiple copies of the final agreement are signed by each of the parties. Each party will then receive a signed original of the final agreement.

Step 5:
Deposit Materials

The software developer will then deliver the source code and other supporting documentation to SCEC. The materials typically deposited include the source code on CD-ROM, the source code on hard-copy, etc. In terms of requirements, the source code commentary as well as other supporting documentation must be in English, and all materials must be accurately labeled and dated.

Types of Escrow Agreements

A Single-User Escrow Agreement is one where there is one licensor (developer) and one licensee (customer) and one agreement is signed by SCEC, the licensor and the licensee.

A Multi-User Escrow Agreement is one where a licensor (developer) would like to establish a form of agreement which can be used for the benefit of any of its licensees (customer) who enrol. The agreement is signed by SCEC and the licensor and a separate enrolment schedule is signed as each licensee is added.