IP, Technology & Data

I have been tackling a bit of work concerning source code escrow. Source code escrow is the deposit of source code of software with a third party escrow agent. This source code can be released to a licensed user of the software – but only if the business or party licensing the software files for bankruptcy (or similar), or otherwise fails to maintain and update the software as it promised in the software licence agreement.

Unlike most compromises, escrow doesn’t leave both parties grumpy. The software provider can keep its source code secret, while the licensee can be safe in the knowledge that if anything goes wrong then software which is valuable (or even central) to its business can continue to be maintained and work properly.

Source code escrow originated around 1975 and today the NCC Group is the world’s largest software escrow provider. In order to enliven this post I called them for some interesting statistics about how many source code escrows they process annually. Unfortunately they declined to provide any details.

So let’s discuss instead the provenance of “escrow”. The word is apparently derived from the French word escroue meaning “scoll” or “roll of writing”. In France in the middle-ages an owner of property executed a kind of deed conveying land to another party on the fulfilment of certain conditions. This deed, the escroue, was given to a third person with instructions that it would take effect as a deed on the performance of an act or event – such as payment of a designated sum of money, or perhaps delivery of a delicious pain au chocolat. This concept was brought to England and in time the term escroue was Anglicised – to escrow.

So now you know. And If you ever win a pub quiz off the back of this you owe me a pint.

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Martin Sloan

Partner at Brodies LLP
Martin is a partner in Brodies Technology, Information and Outsourcing group and has wide experience of advising clients on technology procurement and IT and business process outsourcing projects. Martin also advises on data protection (including the GDPR), and general technology and intellectual property law, and has a particular interest in the laws applying to social media and new technology such as mobile apps, contactless/mobile payments, and smart metering.
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