“Sorry, Your Escrow Deposit is Useless”

By: In: Technology Escrow On: Jul 16, 2015
“Sorry, Your Escrow Deposit is Useless”

As an enterprise account executive, many times I’ve had to tell customers, “Sorry, but your escrow deposit is useless.” Of course, that’s not a conversation I like to have.

This situation happens during the verification process if we are unable to build out the materials in the customer’s escrow account because something is missing or it is not the most up-to-date version of the technology.

Here’s some advice that will help both of us avoid that disappointing conversation.

Whether you are the software developer company or the company licensing the software, you want to make sure that the materials you have in your technology escrow account are usable in the event that you need them.

Escrow Verification Lessons Learned

I recently worked with a company who had just that problem. For confidentiality purposes I can’t name names, so let’s call the software developer GreenBelle Software and the licensee Red Function, Inc.

Red Function reached out to us because they wanted to make sure that what GreenBelle claimed was in the escrow deposit was actually in there. We started the verification process by taking an inventory of the deposit. During the inventory, we found out that the deposit was missing both build and installation instructions (documentation). When we told GreenBelle what was missing they had no idea that build and installation documentation was a requirement.

Once we received the documentation we continued the verification process by trying to recreate GreenBelle’s development environment by building (compiling) the source code from the deposit. Something you can’t do if you test at the developer’s site. During the compilation process we found out that there were some missing third-party libraries that were required to build the code. GreenBelle again updated their deposit.

Finally, a successful build of the deposit! Our next step was to recreate the production environment so that we could perform functional testing on the escrow deposit. We were able to install the code and perform the verification testing that we needed to. However, during the process we discovered that GreenBelle had deposited the wrong version of their product software into the account.

After GreenBelle updated the account again with the correct version of the software, we were able to confirm that the deposit was fully functional in the event that it needs to be.

Don’t just assume – Check, and then Check Again

If Red Function had not come to us asking to verify that what GreenBelle told them was in the deposit account was actually there, they would have found out too late, if the code was ever released. If GreenBelle suddenly went out of business unexpectedly, Red Function would have received materials that would be useless to them because they wouldn’t be able to build them in their own environment. This is truly the value of escrow verification services – ensuring a complete and functional deposit, and defining what you need to do in order to reconstruct the technology should the need arise. This gives the licensee the most leverage in the event that something happens.

We aren’t saying that GreenBelle purposefully forgot to add certain materials into the account – we are saying that mistakes happen andoften assumptions are made about what exactly needs to be in the account. Whether you are the software developer or the company licensing the software, make sure you are having the “verification conversation” to find out what’s really in your escrow deposit and if it will be of any value when it is needed the most.

 

 

 

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About the author

Shane Ryan

Shane Ryan, Enterprise Account Executive, Iron Mountain Intellectual Property Management. Shane Ryan has been running Iron Mountain’s Verification Services since 2002. Shane also handles the Registry/Registrar Data Escrow business for Iron Mountain Intellectual Property’s largest customer, ICANN. Shane is in regular attendance at all ICANN meetings and industry events. In addition, he travels often and conducts lunch and learns with large customers and law firms speaking on the importance of verifying the IP that Iron Mountain holds on their client’s behalf. Follow Shane on Twitter @Shane_T_Ryan