Summary:
Technology escrow services protect valuable intangible assets. These agreements ensure business continuity by safeguarding IP, data, and technology. Learn about five emerging technology escrow services: AI solutions, SaaS, domain names, data, and inventions.
Main Points:
- Technology Escrow: Legal agreement to protect mission-critical tech and IP.
- AI Solutions: Safeguard machine learning algorithms and related assets.
- SaaS Escrow: Ensure access to software and customer data in adverse events.
- Domain Name Escrow: Protect domain credentials during transfers.
- Data Escrow: Secure backup of essential data in case of breaches or failures.
- Inventions: Protect and verify IP-related inventions and prototypes.
Is your business’s most valuable asset intangible?
As technology continues to expand, more and more proprietary solutions are beginning to emerge. Businesses seeking to keep their solutions safe might benefit from technology escrow services.
In this guide, we’ll explore five emerging technology escrow services. These legal agreements are inspiring peace of mind in innovative business owners worldwide. Continue reading to learn how to ensure business continuity in the dynamic, quickly evolving digital age.
What Is Technology Escrow?
Many businesses rely on mission-critical technology to function. In such workplaces, technology is the beating heart of the operation, ensuring daily continuity and enabling growth. Without technological solutions, proprietary IP, or formulas, these organizations would find themselves unable to run.
Technology escrow is an agreement between a technology vendor, a licensee, and a third-party technology escrow company. Together, the parties craft a technology escrow agreement.
In that legal document, they identify certain “trigger conditions.” When met, the vendor must release pertinent source code and IP to the licensee. Thus, in the case of an adverse event, the licensee will not lose access to the technology they need to function.
Software escrow and SaaS escrow fall under the umbrella of technology escrow services. This broad category encompasses a wide range of materials, license types, and technology deals. Unlike source code and SaaS escrow, technology escrow can hold nearly any piece of technology. Deposit materials range from physical prototypes to encryption keys.
An escrow agreement can include any technology that can be stored physically, electronically, or in the cloud. Thus, as the definition of “technology” begins to expand, more and more emerging tech will fall into this category.
1. Technology Escrow for AI Solutions
Market trends suggest that the Artificial Intelligence industry will be worth $826 billion by the year 2030. Thus, there is a need to protect proprietary machine learning algorithms.
Many aspects of AI-operated solutions are considered intellectual property (IP). As a result, the owners of the IP are entitled to legal protection. If AI or ML algorithms are mission-critical tools, you may wish to invest in technology escrow services.
You might consider placing the following AI assets into a technology escrow account:
- Training sets
- Training parameters
- The architecture of the system
- ML systems with a specific use case
- Software associated with ML systems
This agreement protects the vendor, who owns the IP for the AI solution. It also protects the licensee, who uses the solution daily. If a trigger event occurs, the licensee will gain access to the assets necessary to continue using the technology.
Meanwhile, the vendor establishes confidence and achieves smoother negotiations. Both parties have peace of mind knowing these crucial assets are safely contained and accessible.
2. SaaS Escrow Services
SaaS stands for “Software as a Service.” According to IBM, SaaS applications are subscription-based software models that exist in the cloud. There is typically no tangible software involved.
Without access to a running copy of software, the licensee may lose access to their customer data. This may occur in the event of a breach, bankruptcy, or other adverse event. Licensees also risk losing access to their mission-critical application. Thus, SaaS escrow can be a component of a business’s disaster recovery plan.
SaaS escrow gives licensees access to a current record of their mission-critical data. It’s a way to streamline the timely availability of your most critical solutions, even following a disaster.
3. Domain Name Escrow Services
Like algorithms and source code, domain names are intangible assets with a high value. A domain name escrow is a type of technology escrow that protects the domain’s credentials. This is beneficial when purchasing a new domain or using an existing, valuable domain as collateral.
In the case of domain name escrow, the “trigger” condition is not typically an adverse event. Instead, the technology escrow company will release the domain credentials when a designated release condition is met.
All such agreements are customizable. Thus, the release conditions can be any set of circumstances determined by the parties involved. Frequently, these include the verified transfer of a payment or the end of a loan period.
4. Data Escrow Services
Data escrow also falls under the umbrella of technology escrow services. Any mission-critical data you need can be placed in a technology escrow account.
Data will be released to the licensee in the event of a:
- Security breach
- Long-term service failure
- A vendor’s failure to maintain current security licenses and certifications
As a result, a backup will be available in at least one secure, off-site physical location.
Assets considered “data” might include:
- Customer databases
- Customer records
- Financial records
- Research data
In essence, any sensitive data necessary for the continuity of business can be placed into a technology escrow account.
5. Escrow Services for Inventions
The formal definition of technology escrow services is kept broad for a reason. The best technology escrow companies recognize that technology is shifting fast. The landscape is changing rapidly, and the solution you wish to protect may not fall into a tidy category.
Technology escrow services can also protect inventions that fall into the realm of IP.
Consider creating an IP audit trail for proprietary assets, including:
- Invention disclosures
- Drawings and diagrams
- Prototypes
- Samples
- Formulas
Invention escrow agreements can be helpful when entering an agreement with a lender or investor. Your technology escrow company will be able to independently corroborate the existence of all assets.
Likewise, the existence of your assets in an escrow account is legally defensible evidence. You can easily prove you possessed your assets on a given date. Furthermore, you can efficiently provide a clear timeline of the idea’s development. This documentation is critical in the event of litigation against infringement.
Innovation continues to push through the technology escrow industry. Learn more from our technology escrow service page now.